Native Advertising Budgets Will Rise In 2015, Say Marketers

Yahoo CMO Kathy Savitt on Yahoo’s Native Ad Impact, Digital New Fronts 2014

Marketers are planning to increase investment in native advertising. Sixty-three percent of marketers say they’ll be spending more on native advertising this year. That’s according to a survey of 127 client-side marketers by the Association of National Advertisers (ANA).

Native ads reflect the look and feel of the editorial environment in which they appear. Publishers have been rolling out native advertising opportunities — and adding editorial and creative staff to create sponsored content — as a way to increase ad revenue, and often charging higher rates for native ads than traditional banners.

In the ANA survey, conducted in the fourth-quarter of last year, the majority of those polled (58 percent) said their companies used native advertising in 2014 and increased budgets by 55 percent from 2013.

Despite that sizable percentage increase, native ad spending accounted for just 5 percent or less of total advertising budgets for 68 percent of respondents in 2014.

Of those using native advertising, 85 percent are running campaigns on digital publishing sites and 71 percent on social media sites. Eighty percent run native ads on article content, while roughly 60 percent use native video and photo ad placements.

The seamless integration of native advertising with the content surround it raises red flags around disclosure and ethics that the industry have been grappling with. Two-thirds of survey respondents agree that clear disclosures are a must on native advertising. (Thirteen percent actually said clear disclosure on native ads isn’t needed.)

“Native advertising is proving to be a win for marketers, consumers, and publishers,” said Bob Liodice, president and CEO of the ANA. He warned, “However, consumers must be able to tell the difference between native advertising and editorial. As such proper disclosure is mandatory. Marketers have a responsibility to be transparent to maintain trust, and they must play a lead role in working with publishers to ensure proper disclosure.”

Adequate measurement tools also remain a challenge for native advertising campaigns, say marketers. “There are concerns that measurement challenges could impede further growth of native advertising. The industry needs a deeper relevant set of metrics that provide greater insight for native advertising effectiveness,” says the ANA.

While publishers clearly feel differently, just 19 percent of marketers said native advertising warrants premium pricing. Better measurement tools may help sway that opinion.

About The Author

Ginny Marvin

As Third Door Media’s paid media reporter, Ginny Marvin writes about paid online marketing topics including paid search, paid social, display and retargeting for Search Engine Land and Marketing Land. With more than 15 years of marketing experience, Ginny has held both in-house and agency management positions.