Native advertising went mainstream this year, and as we look back at its impact in time for this Thanksgiving, we can see there is much for which to be grateful.
1) Native ads are what the industry was anticipating.
70% of individuals want to learn about products through content rather than through traditional advertising. And this is exactly what native advertising gives and what traditional formats of advertising were missing. Native advertising is not just a product, this is an essential stage of digital advertising industry evolution. It was forecasted that roughly 65% of both ad agencies and marketers would invest in native advertising, for an estimated total of $4.3 billion, this year.
While we still have to wait a couple of months until we know if that happened, let’s look at the results of the recent study from digital marketing consultancy 614 Group which describes the level of appreciation that marketers and publishers have for native advertising right now. It states that 69 percent of marketers consider native advertising “interesting and valuable.” What’s more, 22 percent see it as “the future of digital advertising.”
To further reinforce the momentum that native advertising has right now, it has to be stated that U.S. native ad spending on social sites will reach $2.36 billion, or 38.9 percent of total U.S. paid social ad expenditures this year. By 2017, social native ad spend will grow to $4.57 billion, and its share of social spending will inch up a few percentage points to 41.7 percent.
The same promising results have been observed at MGID where half-year results in 2013 vs. half-year results in 2014 demonstrate 31% growth.
However only 24 percent are currently using publisher-side native offerings, while only 18 percent are using the content discovery and recommendation platforms that could amplify a native ad and extend its reach, which means that there’s plenty of room for growth.
Thanks native advertising for the interesting future!
2) Native ads make website visitors pay attention, without distracting them.
According to Statistic Brain, a person’s average attention span was 8 seconds at the end of 2013, which is a 33% drop from 2000, when it was 12 seconds. A goldfish has the attention span of 9 seconds. Many of you won’t read this article till the end, and some of you have already stopped reading it.
While we can argue about the practical implication of these stats, it’s pointless to argue about the importance of being able to get the attention of your potential customers, who are already very ad-weary. Today it may be one of the dominant factors of success as people want to get incentives for their attention. And that’s what native advertising does – it brings attention without distraction, unlike many traditional ad formats.
Just look at the stats:
A study conducted by Sharethrough and IPG shows that the consumer looked at native ads 52% frequently than banner ads and even that consumers looked at native ads more than the original editorial content.
Thanks to native advertising for bringing attention to our content and products!
3) Native ads are highly efficient.
Native advertising allows marketers and publishers to benefit from “invest less, earn more” strategy. The essence of the format itself and new technologies brought up by its peculiarity makes native advertising a very attractive investment.
According to J.P. Morgan, native ads represented just 5%-to-10% of Facebook’s impressions in 2013 but accounted for more than 60% of the company’s revenue.
Initial tests on Hearst’s native content module produced a click-through rate between 1 and 1.5 percent compared to the industry average of 1 percent on traditional display ads, according to Hearst.
A native advertising play by GE resulted in 416,000 click-throughs – a CTR of 8 percent. Display advertising CTRs average at 0.19 percent.
ClickZ reports native ads can have a click-through rate 15-45 times higher than display ads. According to Yahoo CEO Marissa Mayer, those who view native ads are 3.6 times more likely to perform a branded search than viewers of banners.
What about mobile?
According to the latest IAB revenue report mobile is one of the most promising fields in advertising, showing 76% half year revenue increase in 2014 compared to 2013. Industry studies report that mobile native ads boast click-through rates of 1.37%, a significant lead over the average .35% click through rate for the traditional mobile banner ad.
Thanks to native advertising for making our ads efficient!
4) Native ads both earn money and also bring value to customers.
It isn’t just about incomes and efficiency, native advertising is also about putting consumer first. It solves “incomes vs. customers’ loyalty” dilemma, because publishers don’t have to choose anymore – they can have both. With native approach advertising isn’t just ads – it is also a personalized recommendations system. If we look at native monetization solutions for publishers, we will see that it’s not just about generating additional revenue stream for publisher and the native ad company itself, but about the user as well.
Content shown in the native in-feed placements is selected from the best websites around the web and it’s bound to reflect interests of website visitors. It’s a win-win situation for publisher and publishers love it. The State of Native Advertising 2014 report, published by native advertising exchange provider Hexagram in partnership with Spada, a research and public relations firm, reveals some spectacular stats. Based on the findings in this study, publishers are happy with native advertising and expect it to continue to grow:
- 85% of content publishers believe that native advertising represents a new and viable revenue stream
- 84% of content publishers believe that native advertising adds values to their audiences
- 10% of content publishers expect native advertising revenues to increase by 10% within one year
Thanks to native advertising for bringing high value to the web users!
5) Native ads engage the consumer.
According to Online Publishers Association 57% of US publishers said engagement was the primary measurement that marketers use for native advertising; followed by traffic at 43% and social sharing at 33%. In fact, engagement is one of the aces that native advertising has in its deck because it provides active experience and relates to the consumers’ feelings and emotions.
Let’s get back to Sharethrough and IPG study to prove it: 25% more consumers were measured to look at in-feed native ad placements rather than standard banners. Native ads also registered 9% higher lift for brand affinity and 18% higher lift for purchase intent responses than traditional banner ads.
According to the CPO of Celtra“when designed and built as rich media ads, native ads consistently outperform standard ads across all engagement metrics. Ad engagement rates, for example, are 39.1%—more than three times higher—and video completion rates are nearly twice as high as those in standard rich-media ads.”
Thanks to native advertising for the engaged audience!
6) Native ads create dynamics in the whole digital advertising ecosystem.
Even if marketers and publishers aren’t using native advertising (which all of the major ones are), even if they don’t like it, there are still reasons for them to be thankful to native advertising. Thankful, because it affects and adds a lot of dynamics to the whole digital advertising ecosystem. Since its inception in 2011 until today it has brought a lot of new ideas and technologies to the digital advertising table and has raised a lot of debate, which was very useful to the industry (think of the latest debates started after John Oliver’s take on native advertising, which caused a lot of constructive dialogue about standardization).
Thanks to native advertising for adding dynamics to the digital advertising industry!
7) Native ads know their audiences.
There are a lot of new technologies involved in native advertising. These technologies offer outstanding targeting options and hold incredible potential for further improvement. Neil Hiltz, head of global marketing for financial services at Facebook says: “Facebook ads are 90% accurate with our native targeting products — using geo, demo, interest, smartphone, etc., as variables. We can layer this targeting with the bank’s data to gain even more efficiency”. As a comparison, online ads can target users with an accuracy of about 50% on average.
Google’s native advertising network which was presented not so long ago also offers unprecedented targeting capabilities, which is understandable considering the amount of data they possess.
Thanks native advertising for excellent targeting!
8) Native ads raise awareness for important economic and environmental issues.
Let’s face it – our world is still a harsh place with a lot of injustice and things that all of us would like to fix and improve. Considering the reach and impact that native advertising has it has already proved to be a good tool to raise awareness for important social and economic issues. The best thing about it is that while watching it people engage with it much more and become really involved. Increase of their attention and absence of intrusion increases memorization and the potential to perform actions that benefits society, after watching the ad.
Some of the good examples of such native ads are:
- Dr. Martens and TaviGevinson’s Rookie Magazine teen-focused campaign spotlighting six advocates whose causes range from gender equality to female empowerment.
- Through the use of Slate’s internal agency SlateCustom, and native advertising platform Polar’sMediaVoice, University of California ran a series called Breakthroughs, which aimed to raise awareness around research conducted on the University system’s various campuses.
- Netflix sponsored a paid post on The New York Times, tying the piece to its fictional, but based-on-a-memoir, women-in-prison series. The advertisement, which dives into the topic of women in prison.
Hopefully, native advertising will deliver much more incidents of positive impact in future. Thanks for this!
9) Native ads are scalable.
It isn’t possible to scale all types of native advertising, however some types are perfectly scalable. It’s content recommendation and content discovery platforms that are able to show some spectacular results in this. For instance, at MGID we work with every publisher individually and perform all the integration. Because of this tremendous preliminary work advertisers can easily scale up, increase volumes of traffic and see their business objectives met. Advanced and flexible targeting and optimization options help to reach campaign goals faster.
Thanks for native ads for fitting different sizes and budgets!