The Rise of Native Advertising

By Justin Choi, CEO, Nativo

In digital circles, native advertising has increasingly garnered popularity as a new form of marketing that can potentially save display from its own demise. Major media companies such as The New York Times, Dow Jones, Hearst, and Condé Nast have launched native initiatives, and 90% of OPA members plan to follow suit this year. Additionally, according to a recent LinkedIn Marketing Solutions report, roughly 65% of ad agencies and marketers plan to invest in native advertising this year, for an estimated total of $4.3 billion in 2014.

So why all the hype around native advertising? Display advertising to date hasn’t evolved and still largely involved disruptive interstitial ads, leaderboard banners, and square units inhabit the right rail ghetto (a name even the IAB uses). As consumers continue to exhibit an aversion to interruptive advertising, and increasingly connect to the web via multiple devices (e.g. smartphone, tablet), traditional display is not keeping up with the trends in consumption behavior. The whole purpose of native ads, on the other hand, is to remove the disruptive aspect of advertising, create content experiences that add value to consumers, and more closely match publisher editorial strategies, which are to provide great content to their audiences. Native represents a new era of digital advertising, one which opens a host of exciting creative options for advertisers to reach and engage audiences authentically with content and, at the same time, add value and utility to consumers’ site experiences.

As we enter the second half of the year, I expect to see a few developments in 2014 with native advertising:

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A new content creation ecosystem will develop.
More than ever, good content is becoming the soul of effective creative, and the rise of native has accelerated the need for a whole new market economy around content creation. This isn’t surprising, many others before us have gone through the same cycle. For example, think of the early days of TV and radio ads. Show writers and producers were initially tapped as ad copywriters and producers because they were most intimate with content and good at storytelling. But as the ad industry matured in these channels, the network of content creators expanded significantly.

Native advertising is no different. Brands are starting to own the process and create content in their own voice, and a whole infrastructure is emerging to support their expanding content ambitions. Major agencies, specialized agencies, and startups are helping brands create greater amounts of content, further driving demand for native experiences. This is an exciting time.

Accountability and measurement will be driven by attention rather than impressions.
It’s a widely accepted fact that we now live in an “attention economy,” where advertising and new content forms across multiple devices and channels aggressively compete for a consumer’s increasingly limited attention span. Because of this, it’s no longer sufficient for brands and agencies to count impressions and page views–while these metrics may demonstrate an ad rendered on a page, they don’t necessarily show anything about how effective an ad was. As native ads become standard fare for marketers, engagement will unquestionably become one of the core key performance indicators (KPI). The good news is that the tools to measure attention will become more robust and accessible to marketers. As a result, brands will gain new insights into what their consumers want, and will have the ability to fine-tune their messaging in real-time to deliver on their promise.

Display budgets will shift into native.
Publishers and media companies will generate greater revenue from new native advertising opportunities, while improving their ad product portfolios and user experiences. Additionally, as analytics become more sophisticated and more deeply integrated with other ad campaigns, advertisers will see greater results from native solutions than from their display counterparts. Expect to see native ads continue to thrive, largely at the expense of banners.

While every industry insider, digital marketer, and journalist continue to debate the various nuances and forms of native advertising, there’s no question that native will continue to rise as a major player in the ad ecosystem.

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