Native Advertising Predicted To Dominate Digital In 2014

by , Jan 9, 2014, 1:19 PM
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Say goodbye to the stigma associated with native advertising.
 
Following The New York Times’ official embrace of the once-controversial ad format, J.P. Morgan is predicting that native will take over digital channels in 2014.
 
“We believe native ads are quickly becoming the de facto ad format on mobile and increasingly moving into desktop,” lead analyst Doug Anmuth wrote in J.P. Morgan’s annual “Nothing But Net” report, released on Thursday.
 
It is significant that Anmuth and his colleagues are tying the success of native to mobile, considering that they expect ad dollars devoted to the channel to overtake desktop dollars this year.
 
As for what makes native ads so special, J.P. Morgan calculates that they deliver a huge bang for the buck. Indeed, according to the securities firm, native ads represented just 5%-to-10% of Facebook’s impressions in 2013, but accounted for more than 60% of the company’s revenue.
 
“We think native ads also have significantly higher click-through rates than traditional display ads, which leads to higher pricing over time,” according to Anmuth.
 
But, what makes native so well-suited for the mobile medium? “Native ads are ads embedded in a [Facebook] NewsFeed or [Twitter] stream and in many cases closely resemble organic content, making them much more likely to get clicked on compared to historical banner display ads,” according to Anmuth and his team.
 
As a result, “we believe a growing interest in mobile advertising from brand advertisers coupled with improving mobile ad formats suited for smaller screen sizes should help to bridge the gap between time spent on mobile and mobile marketing spend.”
 
Moreover, “while the majority of Facebook and Twitter ad revenue is now generated through native or feed ads, we believe other publishers, such as LinkedIn and Yahoo, are also increasingly shifting inventory to the format.”
 
Last year, eMarketer predicted that the native niche would hit $2.85 billion by 2014. Yet industry thought leaders have implored publishers and brands to rethink their use of native advertising.
 
“Publishers should say ‘no,’ more than ‘yes’ to native,” Steve Rubel, executive vice president of global strategy and insights at Edelman, told attendees an the OMMA Native conference, in November. “As an industry, we’re going way too fast.”

6 comments on "Native Advertising Predicted To Dominate Digital In 2014".

  1. Anni Paul from BoscoSystems
    commented on: January 10, 2014 at 2:56 a.m.
    Been saying this all along, with one qualification - native ads will dominate 2014, but particularly on mobile. Look at what Airpush, MoPub and others are doing with native ads on mobile. The market potential here is insane... http://techcrunch.com/2013/10/10/airpush-acquires-hubbl-for-15-million-to-bring-native-ads-to-mobile/
  2. Nicholas Theodore from Self-Employed
    commented on: January 10, 2014 at 9:57 a.m.
    "Native Advertising" will end up being the surest way to disengage viewers and readers from a web site or blog. Give it about another year or 18 months before it reaches the tipping point.
  3. Brian Quinn from Triad Retail Media
    commented on: January 10, 2014 at 11 a.m.
    Please stop using the NY Times Dell execution as an example of some kind of fabulous "native" advertising format. It's a mini-site, with sponsored content and curated articles. The only way a reader gets to it is to click on a co-branded banner. This is NOTHING NEW!! We did this all the time when I was at WSJ 6-7 years ago...so did NYT. Now it's "native"...wow!
  4. Ryan Bifulco from Travel Spike
    commented on: January 10, 2014 at 11:39 a.m.
    Good info on Native. My article from April also has some great insight on Native and custom content which comes in various flavors: http://www.mediapost.com/publications/article/199237/travel-like-a-native-advertiser.html
  5. Jonathan Hutter from Garrand
    commented on: January 10, 2014 at 12:47 p.m.
    J.P. Morgan likes Native for the return to the publishers, not for the effectiveness. Right now, they resemble organic content in the manner of an outsider butting into a party conversation with barely relevant information (kind of like a bad insurance salesman). It's as likely to make you walk away as engage. If we're measuring success by a click-through, we're doing advertisers a disservice. It seems the emperor has a lot of new clothes these days.
  6. Paula Lynn from Who Else Unlimited
    commented on: January 10, 2014 at 5:19 p.m.
    Horrible misnomer. There is nothing native about it. It is propaganda advertising. It is deliberately written, planned, edited and executed. Can it be informative and entertaining ? Sure ! But hiding an advocacy as news is propaganda. The name itself to explain itself is propaganda.

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