• by Jack Loechner , Staff Writer @mp_research, November 19, 2013

According to a new survey by Hexagram and Spada to gather input from the key stakeholders most likely to be involved with, and affected by, the rise of native advertising: publishers, brands, and agencies, publishers are driving current use, with 62% of publishers currently offering native advertising and another 16% planning to do so within the year.

Brands and agencies’ use is currently smaller, but growing: 41% of brands and 34% of agencies currently use native advertising, with an additional 20% of brands and 12% of agencies planning to begin using it within the year.

One of the problems, says the report, with understanding attitudes and usage of native advertising is the term itself: ‘native advertising’ means different things to different people. Before giving a definition of this new form of marketing, the goal of the survey was to explore how key stakeholders define it.

In open-ended responses, respondents commented about their lack of knowledge about native advertising, did not know what the term referred to, or had never heard it. The survey provided the following definition of native advertising, which was taken from Wikipedia, after asking this question to ensure respondents understood the basic concept throughout the rest of the survey:

• Native advertising is a web advertising method in which the advertiser attempts to gain attention by providing content in the context of the user’s experience; for example, ads appearing alongside search results are ‘native’ to the search experience.

The survey found that professionals consider a variety of advertising content to fall under the category of native advertising, with the majority of respondents choosing ‘sponsored’ content as the most fitting description, followed closely by ‘featured’ content and content ‘brought to you by’. The most popular forms of native advertising are blog posts (65%), articles (63%), and Facebook (56%).

Definitions of Native Advertising
Definition	% of Respondents
Sponsored content	53%
Featured content	47
Content “brought to you by…”	45
Micro sites	25
Company branded pages	38
Source: State of Native Advertising, Hexagram and Spada, November 2013

There were significant differences between stakeholder groups. Publishers are more likely to identify native advertising as ‘sponsored’ content (69%) than agencies (49%) or brands (41%), while brands are more likely to think of native advertising as content ‘brought to you by’ (50%) than either other group (31% and 33% of publishers and agencies chose this option, respectively).

The survey asked brands and marketers about what motivates them to use native advertising over more traditional forms of advertising. The most popular responses were:

• Provide a more relevant message (67%)
• Increase consumer engagement (63%)
• Generate awareness or buzz (62%)
• Create word of mouth (48%)
• Combat ‘banner blindness’ (43%)

84% of publishers, 81% of agencies, and 78% of brands believe that native advertising adds value for consumers. 66% of brands say that they create content used in native advertising campaigns on their own. 79% of publishers clearly label native advertising campaigns, says the report, to distinguish them from editorial content, and the majority of publishers and brands have not received complaints as a result of native advertising campaigns.

Brands use native advertising not to simply generate click-through to the marketer site, or even to generate sales. Instead it represents an opportunity to provide a more relevant message and ratchet up engagement with consumers, says the report. Publishers in particular commented that native advertising is ‘better aligned’ with the media used today and offers additional credibility over traditional advertising.

When asked which types of native advertising they had used, the study found that the most popular were:

• Blog posts (65%)
• Articles (63%)
• Facebook (56%)
• Videos (52%)
• Tweets (46%)
• Infographics (35%)

Publishers and agencies have the most experience with articles (65% and 64% respectively), while brands most often use Facebook (66%). It is interesting to note, says the report, that, compared to brands and agencies, publishers say they have significantly less experience with many forms of native advertising, including Facebook, videos, tweets, and infographics.

Agencies who had worked native advertising campaigns in the past reported that their role was most often to provide strategy and written content/copy:

• Provide strategy   61%
• Written content   53%
• Design   37%
• Research   36%
• Thought leadership   26%
• Interactive   19%
• Media buying   38%

Publishers think the most effective forms of native advertising for monetization are blogs (58%), articles (56%), and videos (53%); agencies and brands agree but rank videos number one and are also more positive about Facebook and infographics.

Publishers expect revenues from native advertising to increase by approximately 10% within a year: from an average of 20.4% of overall revenue today to 30.1% in one year’s time. Agencies, too, expect an increase in native advertising; they expect to increase the time and resources they spend on native advertising campaigns from 25.5% today to 27.9% in one year.

Client-side marketers are more ambivalent: while those that currently use native advertising expect spending levels to increase from 27.5% to 33% of their overall budget in one year, overall brands expect to be spending 24.3% of their budget on native ads in one year (figure includes all brands surveyed, regardless of whether they currently use native advertising).

The report concludes by noting that “It is promising that brands and agencies see that native advertising has the potential to help them deliver more relevant messages to consumers. This demonstrates an appreciation of the real value proposition, delivering valuable content in a highly appropriate context to consumers.”

For additional details, please visit here to access the complete PDF file on the State of Native Advertising, 2014.