2013 will be remembered as the year “native advertising” transitioned from a buzzword to a full-fledged category. As with any newborn, there will certainly be some wobbles and falls along the way, as the native category quickly goes from crawl to walk to run, but what’s clear is that native will grow and mature into an important part of the digital advertising ecosystem.
All of this is ultimately a net positive for consumers. With the necessary transparency in place, native ads will push brands to shift their approach from interruption to engagement, delivering value, and offering information, entertainment and utility to users.
With stalwart publishers such as The New York Times, Dow Jones, Hearst, Time Inc. and other major media companies announcing native initiatives, 2014 promises to be an amazing year for native advertising. Roughly 65% of ad agencies and marketers plan to invest in native advertising, for an estimated total of $4.3 billion, a projection that will increase significantly as the native category is better measured and tracked.
So what does this mean for the industry? Here are some developments to watch for this year.
1. Native and in-stream: the confusion subsides. What we call "native" today will distill down to two categories: native and in-stream. Native will be the ad unit of choice, a fully integrated site experience for deep consumer engagement and attention, while in-stream will fit the bill for driving actions such as video views or traffic to secondary sites. This delineation will reduce the marketplace confusion as to what is and what isn’t native, since non-native units located in-stream will have a definition of their own.
2. Brand Storytelling will be the new buzzword. Just as we saw the rise of the term “engagement” in 2011, and “native” in 2013, “brand storytelling” should gain popularity in 2014 and drive further adoption of native distribution. Savvy marketers will go beyond communicating and move into storytelling. Brands will start to realize that corporate citizenship, event sponsorship, charity support, customer interactions, and even their own employees are sources of great brand stories to tell the world. In 2014, brands new to content will struggle with the mechanics of generating it. Brands that are more experienced will move from simply creating content to telling great stories.
3. The Content Creation
Ecosystem Will Emerge. When a new medium is validated, upstarts and existing players follow quickly behind to build the supporting infrastructure. In 2013, content emerged as the new creative, and
the rapid adoption of native has fueled a growing market for content creation. Last year, publisher-created content made up the bulk of content driving native initiatives. This is a normal cycle with
any new type of advertising: typically, content owners or publishers provide the initial ad-creation services (think of the early days of TV and radio) because the ecosystem to create the ads
doesn’t exist yet.
People sometimes ask whether brands can create quality content, but they never question whether brands can make a quality TV commercial or a quality print ad. The answer is, they can and they will.
In 2014, brands will start to own the process and create content in their own voice. We will see all major agencies, specialized agencies, and startups help brands create greater amounts of content, further driving demand for native placement to get this content in front of audiences.
4. There will be a shift from impression to attention. As native ads become standard fare for marketers, and as analytics tools for all advertising become more sophisticated, engagement will become one of the core key performance indicators (KPI). Advertisers agree that we are now knee deep in an “attention economy” where even media fights for a limited amount of consumer attention, but they don’t have a great way of measuring it. That will change in 2014 as tools to measure attention become more robust and accessible to marketers. This will impact all forms of advertising, as new measurement tools will provide massive insights to brands, enabling them to fine-tune messaging in real time, and understand how audiences are reacting to their content.
5. Brands will look beyond shares. Just as brands outgrew the focus around “Likes” on Facebook, brands will evolve their thinking around “Shares” for native. Tools to measure engagement will facilitate this shift. Brands will view “listicles” as just one of many native vehicles available to engage the consumer. Social sharing will wane as a KPI metric, and brands will place greater emphasis and weight on native solutions that deliver authentic, measurable consumer attention and engagement.
6. Publishers redesign for single streams and infinite scrolls. Leading mobile and social platforms, along with consumer devices, have fundamentally changed the way consumers interact with content. Scrolling through feeds and swiping between pages have become common user behaviors. As a result, expect to see publishers redesign their site layouts for infinite scrolls and single content stream/feed experiences. As site traffic increasingly arrives sideways from search and social, publishers will also redesign subpages to behave like their homepage, with the goal of recirculating traffic and extending user sessions. Since native placements will be measured via engagement, there will be less emphasis on designing sites around creating more ad impressions. This will make for a better Web experience for everyone, with fewer click-to-refresh slide shows, multi-page articles, and IAB banners filling every possible spot on a website.
7. Programmatic noise will increase. Although you can expect to see splashy announcements for native versions of programmatic ad tech such as native ad exchanges, demand side platforms (DSPs), supply side platforms (SSPs), real-time bidding (RTB) and more, these efforts will be premature and there won’t be much of anything behind the curtain.
8. Display budgets will shift into native. Much of the growth of native will come at the expense of banners. Publishers and media companies will generate greater revenue, while improving their ad product portfolios and user experience, and advertisers will see greater results from native solutions than from display units. Expect to see native ads continue to thrive, largely at the expense of banners.