The Buzz Around Native Advertising

Native advertising. What is it, what’s driving it, and what does it mean for advertising?

Native Advertising.

It’s the buzz-word we’ve all heard, but is it just that, or rather a shift in the way we consume digital advertising? I’d argue the later considering the huge opportunity for brands to create unique and compelling content. Not to mention, there are billions of dollars of growth year-after-year. But don’t simply take my word for it, check out the these numbers from BI Intelligence:

• In 2014, native ad revenue saw a 68% YOY increase, generating roughly $7.9 billion
• Native ad revenue is projected to reach $21 billion in ad revenue by 2018
• Social will be the key driver in ad revenue, making up an estimated 70% in 2015

But What is it?

Okay, so native advertising is blowing up and causing some ripples in the digital landscape, but the term itself is somewhat vague and there are a lot of definitions floating around. Native advertising is really “in the eye of the beholder” and therefore there’s no all encompassing definition. That said, one definition I feel does a good job of explaining the term comes from Sharethrough:

“Native advertising is a form of paid media where the ad experience follows the natural form and function of the user experience in which it is placed.”

The key phrase is the experience follows the natural form and function, meaning users shouldn’t feel as though their experience with the site has suddenly changed.

The Interactive Advertising Bureau (IAB) created a simple way to classify native ads into six categories They are: In-Feed units, In Ad (IAB Standard) w/ Native Element units, Paid Search units, Promoted Listings, Recommendation Units, and Custom/”Can’t Be Contained” units if you’re still having trouble finding a home for the ad in question.

Additionally they established a framework to evaluate the effectiveness of native ads as seen in the chart below:

The farther left the ad lands on the chart the “more native” it is. An effective native ad will generally match the form, function, and integration of the site it lives on, however buying, targeting, and measurement are flexible depending on the end goals of the campaign.

What’s Driving it?

It’s no wonder that social will be a key driver given that social activity is increasingly happening on mobile as opposed to desktop, and native “in-feed”-style advertising is well suited to the mobile screen. For example, Facebook revealed 44% of their active users only access the platform through their mobile device, and never through desktop. That’s a staggering figure and tells a strong story of the current digital landscape. Even Twitter recently reported that 80% of their active users are on mobile. This behavior spans all social platforms, and now we are seeing that digital media time spent on mobile/tablet devices has surpassed time spent on desktop, according to comScore. Because of this, publishers such as BuzzFeed and Quartz have begun to take notice of the power of the “feed” and have adopted mobile-friendly site designs with in-feed ads vs. traditional display media. Finally, one of the largest drivers of native advertising is it’s performance relative to standard display media. According to a study by Sharethrough and IPG:

Consumers looked at native ads 53% more frequently than display ads

The same studied revealed that brands that used native ads saw a 9% higher lift in brand affinity and an 18% higher lift in purchase intent relative to banner ads

32% of respondents said they would be willing to share an native advertising with a friend or family member vs. 19% for display ads

What it all Means.

In an age where advertising is slowly moving away from forcing views to inviting views it is important for brands to think about whether or not they are enhancing the user’s experience. In its simplest form native advertising is just that, a way to reach users in non-intrusive way. I believe that brands have three opportunities ahead of them via native ads:

• Increased Trust: Native ads allow brands to deeply integrate and affiliate themselves with the publisher, which in turn builds trust and brand credibility among consumers. Think about it, if a user sees sponsored content on a site such as CNN, they are much more likely to trust the ad given the association to a reliable source.
• Increased Share-ability: In my opinion, what’s so intriguing about native content is the opportunity for brands to tell better stories and create content that lends social currency to those who share it, making them seem “in-the-know.” NORTH recently launched a video series called “Drink Steam With…” in partnership with craft beer brand Anchor Brewing to increase awareness of Anchor Steam by authentically aligning with other local maker brands in SF. The videos feature two local makers discussing their trade and motivations behind their craft and little known facts over an Anchor Steam.
• Increased Adaptability: Finally, with an increasingly mobile audience, native advertising provides a way for brands to reach users in a more efficient manner than traditional banner ads. But it’s not just about addressing the mobile friendly ad experiences. The latest wave of wearable technology requires even more careful consideration of the user experience. Any advertising on these platforms must be aware of the real estate wearables provide so it does not feel out of place or intrusive.

All in all, native advertising is here to stay. Brands now have an opportunity to embody their voice in thoughtfully developed creative that will last longer than a click, and native ads stand to deliver better user experiences where the user will feel more inclined to share branded content and drive earned reach.