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The Future of Native Ads

The Future of Native Ads

Image Source: oDesk

Native advertising has been called ‘ads dressed as content’. It is slowly changing the face of ads in the digital space. Native advertising has not only spawned a host of new ad types, it has also captured marketers’ fancy due to its ROI capabilities.

In this blog post, we attempt to answer the following questions with respect to native advertising:

  • Why are publishers focusing on native advertising?
  • What is influencing the growth of native advertising today?
  • What is it being used for?
  • What does the future hold for native ads?

Native Advertising to the Rescue

The rise of native advertising will compensate media publishers who have been hit by dwindling print ad revenues. According to eMarketer, US print ad revenues will reduce from $32.16 billion this year to $31.29 billion in 2018; digital ad spending on newspapers and magazines will increase from $7.48 billion in 2014 to $8.41 billion by 2018. This shift in ad dollars is encouraging media publishers to turn towards native advertising.

Drivers of Growth

Web users have become so used to seeing display ads that they overlook them very easily as soon as they identify them as ads. The increasing immunity of consumers to regular display ads has prompted advertisers to adopt native advertising to regain consumers’ lost interest. Designed in the format of the host site’s content, native ads blend in to the content and lure users into engagement.

Social media has quickly adapted to native ads’ format (for example, Facebook’s newsfeed redesign). Understandably, native ad spending is strongly focused on social media platforms. However, native ads are also flourishing on content portals, news properties, video sharing sites and streaming services, wherever fresh content is to be found.

As per a BIA/Kelsey research, native ad spends will continue to grow in the coming years driven by mobile devices. As more people take to mobile devices, marketers will increase their focus on mobile marketing and native advertising.

The Usage of Native Advertising

According to the eMarketer study mentioned above, the top 3 reasons brands are using native advertising on mobile devices are for:

  • Raising awareness
  • Branding
  • Brand affinity

Other lead-related reasons like purchase intent and customer acquisition come later in the list of priority reasons. Brand native advertising on mobile devices is more a branding exercise than a sales initiative.

The Road Ahead

Despite being a relatively new concept in digital marketing, native advertising has grown considerably and is poised for further growth.

According to the BIA/Kelsey report mentioned above, in 2014, marketers plan to spend $3.1 billion on native ads in social networks. Growth projections for native ad spending are pegged at a significant 42.4% in 2014. Native advertising offers an interesting opportunity for brands who want consumers to engage with them and they are putting money on this opportunity.

Have you tried native ads? What is your opinion about them?

Team Position2

April 23, 2014

By Team Position2