What is driving native advertising growth, and how can brands do it the right way?

Profile picture for user barb.mosher By Barb Mosher Zinck April 1, 2019
Summary:
Native advertising growth may have slowed - it's still a big factor in the marketing mix. But it's easy to mess native ads up, and native video ads are a trend to consider. Barb surveys the field and shares what brands are learning.

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Native advertising has come a long way from its early beginnings when brands didn’t believe it was truly valuable and some media companies didn’t want to touch it because they felt it would erode their media brand reputation.

Today there isn’t a brand or a media company that isn’t involved in some kind of native advertising. eMarketer forecasts that US advertisers will spend $43.90 billion on native display ads and that number is expected to grow by 20% in 2020. Yes, growth may be slowing, according to the chart below, but it’s still a major marketing tactic:

native-advertising-trends

Source: Advertisers Spend More on Native, but Favor the Same Formats

 How has native advertising changed, and what are the some of the upcoming formats that brands should be considering?

Defining native advertising

In trying to find a good definition of native advertising, this one - a combination from CMI’s Robert Rose and Jesper Laursen, CEO of the Native Advertising Institute, makes the most sense:

Native advertising is a paid/third-party advertising format that supports either brand or direct-response goals, and is where the content matches the form, feel, function, and quality of the content of the media on which it appears.

There are many types of native advertising a brand can choose from today as shown in this image from Verizon Media’s report. Check it out:

native-advertising-formats

Source: The State of Native Advertising 2019, by Verizon Media

The important point about native advertising, said the State of Native Advertising report, is that it “follows the natural form and function of its environment.” There’s usually some sign that you are looking at sponsored content, but most people don’t mind because it fits naturally into the experience they are engaging with.

Graham McDonnell, International Creative Director at The New York Times, agreed in his perspective in the 39 Predictions for Native Advertising:

Authenticity will play a huge part in this and brands will increasingly realise that when done properly, branded content should be indistinguishable from native content it sits around and should have the same quality, tone and standards that the audience have come to expect.

The 2018 Edelman Trust Barometer Study noted that almost half of respondents said it was a brand’s own fault if it’s content was shown alongside inappropriate content and that where its ads are shown is reflective of that brand’s values. Which means it’s not as simple as creating great ads and content and showing them anywhere - where and to who is critically important not just for conversion, but also for brand awareness and positive brand sentiment.

What is driving native advertising growth?

Everyone is talking about programmatic native advertising. The Verizon Media report states that 87% of native advertising will be programmatic in 2019 versus 13% direct. What exactly is programmatic native advertising? It’s the use of machine learning and AI to determine the best placement of native ad content depending on things like audience, context, and other factors - defined by the brand.

Programmatic native advertising can help brands do a better job of ensuring they are putting the right content in front of the right people when it matters. Traditionally, the placement of sponsored ad content has been manual, but that has its limitations.

Mobile is another channel that helping native advertising continue its popularity. According to the Verizon Media report, it’s expected that 87% of native ad spending will be on mobile in 2019 - that’s $38 billion.

A usability study done in the Netherlands against a widely used mobile news app showed that people don’t mind native advertising on mobile news sites if it provides information the reader wants:

When evaluating the three different native advertisements that were used during the study, readers mainly based their opinion on whether the native ad fulfilled their own needs for information. Based on the headline, readers evaluate whether it is worth paying attention to the ad. Next, if the ad fulfills their expectations (and they expect content that has the same quality standards as editorial content), they may evaluate it positively.

The same study indicated that readers prefer native ads over pre-roll video or banners because they felt they were less intrusive, and that gives them more control over whether they will look at them or not.

And there’s mobile video. One of the fastest growing types of native ads, mobile video saw 44% growth in 2018, and according to a mobile video study from Verizon Media, it outperforms pre-roll video ads in terms of both awareness and time spent.

eMarketer agrees stating, “mobile video ad spending will total $15.93 billion this year, with that figure swelling to $24.81 billion by 2022.”

Is there a certain type of video ad that works better than others? One that isn’t popular is simply showing a traditional TV-style video ad at the beginning of a video on YouTube or even in a news stream. Brands need to be more strategic about their use of video for advertising, thinking more along the lines of telling an engaging story or providing critical information.

A few good points for mobile video ads from Bertrand Quesada include:

  • Ads that work with sound on or off.
  • Vertically designed ads (because most mobile users hold their phones vertically)
  • Designing for smaller screen sizes
  • Keeping ad length in mind - he states the first 10 seconds is key to getting the key message and brand across - I think this pretty much applies to any type native ad (or any piece of content really).

The point with his suggestions is that mobile video ads are not a channel that works alongside TV (as in just another place to show your TV ad). Instead, mobile video deserves its own strategy.

Verizon Media offers a few examples of innovative mobile ads including Moments - interactive ads like virtual reality, 360-degree interactive video and countdown ads and Playable Moments - an interactive preview of a mobile gaming app. These examples demonstrate how native advertising is changing to become more audience focused and context-aware.

The final point is that social media is still a primary location for native advertising and it will remain one as long as we continue to spend a huge portion of our time in the endless scroll of Twitter, Instagram, LinkedIn, and Facebook. Native ads that fit the style of the social network will perform better, which means you can’t create one ad and place it everywhere – you have to think about the social network, the audience and how information is presented.