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Is native advertising a trend worth chasing?


There have been two big buzzwords in mobile over the past six months or so: programmatic buying and native advertising.

Programmatic is the process of buying advertising inventory automatically and, arguably, more effectively, impression by impression. Most of the major mobile ad networks now have a programmatic offering. In some instances, they have chucked in the ad network model in order to concentrate on the demand (advertiser) side, relying on the ad exchanges for their inventory, rather than having publishers and app developers signed up to their own network.

Programmatic is without doubt a hot topic. But it is eclipsed, I would argue, by native advertising, where the ad does not look hugely different than the editorial content, but is flagged as an ad with a phrase such as “presented by (the advertiser brand name).”

The reason for the interest in native is not hard to fathom if you look at Facebook. Most people are aware of the company’s recent success with mobile advertising, but they might not all realise how important native is to that success. The company made US$1.5 billion from native advertising last year, with 53% of that coming through mobile devices.

Facebook’s ad business has been built on native.

Last week, the analyst, eMarketer, reported global mobile ad spend more than doubled in 2013 to total US$17.96 billion, up from US$8.76 billion in 2012. That’s a rise of US$9.2 billion. The remarkable point to note is that US$6.92 billion of that came from just two companies: Google and Facebook.

Google is paid search, which you could describe as native once-removed, while Facebook is full-on native. The two companies, not surprisingly, top the league table in terms of market share. Google is miles ahead at 49.3%, while Facebook has 17.5%, having tripled its share from just 5.4% in 2012. In third place is Twitter, at 2.4%, all of which is, once again, native.   

This tide shows no sign of turning.

In a presentation at one of our recent events, Rob Beecroft, vice president of  mobile advertising for MobFox, presented 2013 statistics from the Online Publishers Association and Radar Research, which showed nearly three-quarters of U.S. publishers surveyed already offered native advertising on their sites. Another 17% said they were considering offering it that year. Only 10% did not have any plans to do so.

On the advertiser front, 32% of chief marketing officers said they had bought or were planning to buy native advertising in the next six months.

But what about the final piece in the jigsaw, i.e. consumers? Research from IDG Media labs found consumers viewed native ads 52% more frequently than banner ads (4.1 times per session versus 2.7). Some 25% more consumers look at in-feed native ads rather than standard banners (25% versus 20%). And 32% said they would share a native ad with a friend, while only 19% would share a banner.

When it comes to brand metrics, native ads were found to raise brand affinity by 32%, compared to 23% for banners, and to increase purchasing intent by 52%, compared to 34% for banners.

Even the U.K. government is now dipping its toes in the waters with a native campaign promoting Britain as a good place to do business.

In the digital world, new technology and new techniques are hyped and then dropped with alarming regularity. So I would always caution a certain amount of investigation and skepticism before hooking up to the next big thing. Where native advertising is concerned, however, given the volume of evidence, this is one bandwagon that looks prime for the jumping.

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