Native Advertising: Publishing’s Best Friend?
Digital publishers have long relied on display ads to generate revenue. But between ad blocking, walled content, and user frustration with advertising, publishers have been looking for alternatives.1
One such alternative is native advertising, a form of paid media where the ad experience follows the natural form and function of the user experience in which it is placed.2 And it’s becoming the go-to method for digital outlets to garner ad dollars while keeping users happy.
According to a study conducted by Dedicated Media, people view native ads 53 percent more than traditional banner ads, with users’ purchase intent also 53 percent higher.3
With this in mind, it should come as no surprise that publishers are increasing their spending on this more incognito style of ad.
In fact, as mentioned in the Media Buyer’s Guide to Sponsored Content from Digital Relevance, spending on native ads is projected to increase 400 percent between 2015 and 2018.4
The increase in native ad spending is attributed to the idea that native implementation, when successful, raises revenue through user engagement.
Per a report by Facebook and IHS Inc., engagement rates are 20 to 60 percent higher on native ads than on banners, and drive retention rates that are three times higher. Additionally, on the Facebook Audience Network, the company says CPMs are seven times higher for native units compared to banners.5
In 2014, The Wall Street Journal (WSJ) joined Forbes, The New York Times and BuzzFeed in the native ad game, with the announcement of WSJ Custom Studios, a new division for creating custom native content for big brands.6 It took a unique approach, emphasizing the creation of units that please advertisers while simultaneously remaining transparent with readers.7
“Our view is that as long as you keep things transparent, the big problems largely disappear,” said Trevor Fellows, the Journal’s global head of ad sales.8
Furthermore, DoubleClick collaborated with the New York Times to compile and build native ads that scale across mobile, desktop and app. This partnership lead to greater user engagement, with a 600-percent increase in CTRs, and higher viewability with four times more viewable impressions.9
The execution of native ads has been successful for The Times, with Nicholas Van Amburg, Managing Director of Ad Innovation saying, “The seamlessness of the user experience has improved our performance all around.”10
Hearst has recently planned an expansion of native digital ads to all 84 of its markets in an effort to raise revenue in smaller marketplaces.11This development comes after the publisher found major success in the U.S. market, citing a 35-percent increase in digital revenue, with unique visitors having grown by nearly 50 percent.12
The global native ad rollout indicates a “positive shift” and an important revenue driver, particularly as brands look to connect with their audiences in deeper ways beyond programmatic media, said Erfan Djazmi, head of planning and mobile at Essence, a digital marketing agency.13
Although Hearst has successfully implemented native ads onto its digital platforms, Djazmi warns: “Brands must be careful of not falling into the pitfall of ‘ticking the native advertising box’ and will want to move beyond advertorials and sponsored posts into co-created editorial.”14
And with that word of caution, native advertising clearly presents an opportunity to increase revenue – while increasing user engagement.
1. Arana, Gabriel. “Ad-Blocking Has The Online Ad Industry On The Run.” The Huffington Post. TheHuffingtonPost.com, 20 Oct. 2015. Web. 10 Mar. 2017.
2. “Native Advertising – The Official Definition.” Native Advertising – The Official Definition. N.p., n.d. Web. 07 Mar. 2017.
3. “The Power of Native Advertising.” Dedicated Media. N.p., n.d. Web. 06 Mar. 2017.
4. Aders, Aaron. “The 2015 State of Sponsored Content.” Inc.com. N.p., 13 Jan. 2015. Web. 6 Mar. 2017.
5. “Native ads to make up 63 percent of mobile display ad spend by 2020, Facebook & IHS study finds.” Marketing Land. N.p., 05 Apr. 2016. Web. 06 Mar. 2017.
6. Bilton, March 12 2014 by Ricardo. “The WSJ’s native-ad formula: transparent, quality, and rare.” Digiday. N.p., 11 Mar. 2014. Web. 06 Mar. 2017.
7. IBID
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9. “New York Times native ads case study – DoubleClick.” DoubleClick by Google. N.p., 04 Aug. 2016. Web. 06 Mar. 2017.
10. IBID
11. Davies, March 18 2016 by Jessica. “Hearst expands native ad products globally.” Digiday. N.p., 18 Mar. 2016. Web. 06 Mar. 2017.
12. IBID
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