The Advertising Revolution: How Native Ads Have Changed the Game

The Advertising Revolution

Sponsored by: Market One Media Group

Many decades ago, the world was much simpler for advertisers.

Buying a ½ page newspaper ad or a 30-second television spot reached thousands of people, and consumers weren’t oversaturated with ads.

Today, we are bombarded with over 5,000 brand exposures each day. Of those, 362 are advertisements with only 12 of them “making an impression” on us.

Here’s a breakdown of average exposure per day:

• Average number of advertisement and brand exposures per day per person: 5,000+
• Average number of “ads only” exposures per day: 362
• Average number of “ads only” noted per day: 153
• Average number of “ads only” that we have some awareness of per day: 86
• Average number of “ads only” that made an impression (engagement): 12

With this oversaturation of the traditional ad market, the concept of “native ads” has emerged.

Native Ads

Native advertising is paid content that is created to fit the same format as a publisher’s organic content. In other words, it shows up to regular viewers as “sponsored” or “paid” posts in the same streams as regular content.

Native ad spending has exploded, and from 2013 to 2018, the industry is expected to quadruple in size.

There are compelling statistics for both the audience and advertisers on native ads:

Audience:

• 70% of individuals want to learn about products or content through content rather than traditional advertising.
• 32% of consumers said, when given a choice, that they would rather share a native ad with friends and family vs 19% for banner ads.
• 57% of publishers have a dedicated editorial team to create content readers will care about, leaving publishers in full control, not brands, which ultimately benefits readers.

Advertisers:

• People view native ads 53% more than banner ads.
• Native advertising generates up to an 82% increase in brand lift.
• Native ads that include rich media boost conversion rates by up to 60%.
• Purchase intent is 53% higher with native ads (vs. 34%)
• 49x higher clickthrough rate, 54% lower cost-per-click

New Media

Native ads are also being used by many of the “new media” and adtech companies that have had very successful fundraising rounds:

Vice
Latest raise: $250 million (2014)
Led by: A+E Networks
Valuation: $2.5 billion

AppNexus
Latest raise: $62.7 million (2015)
Valuation: $1.2 billion

Vox
Latest raise: $200 million (2015)
Led by: NBC Universal
Valuation: $850 million

Buzzfeed
Latest raise: $200 million (2015)
Led by: NBC Universal
Valuation: $1.5 billion

The Future of Native Advertising?

Right now 41% of brands use native advertising as part of their marketing mix, but the shift is only beginning. Here’s what experts think the future of native holds:

Tessa Gould, Director of Native Ads Products, The Huffington Post

“Next for native is being able to use other ad technologies to make native smarter. At the moment everyone is creating content and talking about social actions. But how do you go about retargeting the people who view the native ad elsewhere with banner ads and actually converting them into customers?”

Audra Martin, VP of Advertising, The Economist Group

“As publishers start to educate brands more and agencies more, the content will just get better. Then distribution, in terms of getting more sophisticated, not in terms of fooling readers but making it relevant to readers in the right place at the right time.”

Steve Edwards, Digital Sales Director, Hearst UK
“My main thing is about control. Native will continue to develop along the lines it has. Increasingly it’s about publishers taking control of the message and advertisers and brands coming along with us. Getting distribution right and getting measurement metrics right, how we actually measure success. How we can create work that is as good as the editorial that surrounds it. Take the logo off it, does it still work? That’s really interesting for us, and we’ve still got a way to get there.”

Sebastian Tomich, VP of Advertising, The New York Times
“Brands are jumping into native because they feel like they should be.”