Native advertising revenue in 2015 will surpass $7 billion, almost double the 2013 amount, according to some studies.
Why the explosive growth? Native ads perform better than traditional display ads and customers tend to view them favorably.
Let’s take a look at what native advertising is, how it has grown, and where it is going in 2015:
Native Advertising: Ups and Downs
Native advertising is a hot trend in the marketing world, but what is it exactly?
This type of advertising refers to content that is created in the same format as the ad publisher’s primary content. Some blogs, for instance, publish articles that are written by or paid for by advertisers. These are often called “sponsored posts,” and are published in the same format as the rest of the site content, with a disclaimer that discloses the sponsorship.
Native ads have appeared everywhere from Facebook – in the form of sponsored posts – to Twitter, Tumblr, Vanity Fair, and the New York Times.
So why go “native” at all? Why not use display advertising?
The entire premise is this: people are sick of being marketed to, so they tune out banner ads, display ads, and other obvious attempts at marketing. Native advertising, which blends seamlessly with the publisher’s content, bypasses this problem. They are a lucrative and useful way for advertisers to promote and publishers to earn.
Despite their popularity, however, not everyone is a big fan.
John Oliver, for instance, criticized native advertising in one segment on his show. He calls it deceptive and claims that it violates journalistic standards.
But that’s not the only problem with native advertising…users have a trust problem. According to a study by Chartbeat, most people don’t scroll down to view this content when they realize it’s from a brand.
In Contently’s in-depth analysis of this finding, they explained that the problem may lie with the execution: most people don’t even know what “sponsored content” – the term used by content-oriented sites to denote native advertising – means. Contently also trotted out mountains of data that suggest most people don’t trust sponsored content and feel that news sites lose credibility when they engage in native advertising.
The Rise of Native
Despite these concerns, other data suggests that people hold a generally positive attitude toward native advertising. The key concern, according to Business Insider, is that publishers only partner with trustworthy, reputable brands.
Here are a few statistics that demonstrate why native advertising continues to grow in popularity:
Social-native ads are pulling in a huge chunk of revenue for social networks. Facebook, Twitter, and other networks that offer sponsored social posts, are bringing in massive revenues. Business Insider projects that social-native ads will bring in the bulk of native advertising revenue for the next several years.
Around 70% of people would rather learn about products through content than traditional ads. This, again, reflects the reason that many marketers are making the shift to native: people don’t like being marketed to. Most people prefer content that looks less like advertising, and would rather learn about products when they don’t feel pressured by marketing and sales tactics.
Some of the most successful native advertising campaigns have very high click-through rates. GE, for instance, ran a campaign that earned a click-through rate higher than 8%.
People spend nearly the same amount of time reading native ads as regular content. In one 2013 study, viewers were found to spend 1 second reading native ads versus 1.2 seconds reading editorial content.
People have a greater intent to purchase with native ads. According to Dedicated Media, shoppers have a 53% higher intent to purchase when viewing native ads.
More people would share native ads than banner ads. While 32% said they would share a native ad with their friends or family, only 19% said they would share a banner ad.
Publishers don’t have to give up control. Despite concerns that publishers will become the pawns of brands, the fact remains that without subscription fees, advertising revenue will always pay publishers’ bills. Dedicated editorial teams will continue to create content that keeps readers coming back, whether native ads exist or not.
Though some may claim that native advertising isn’t appropriate or undermines the trust of readers, there are some clear indications that native advertising works. Perhaps one major consideration is that people, in general, don’t care for advertising, whether it’s native ads, banner ads, or any other type of ad. Whichever format advertisers choose, the key to earning trust and clicks will be quality, relevance, and transparency.