Commentary

Mobile Native Advertising To Drive $53B In Ad Spend

Facebook’s Audience Network (FAN) is hitting a home run with native advertising. In terms of volume, native ads represent 83% of the ads on FAN and more than 50% of applications on the network using native exclusively. Those are among the findings of a study Facebook commissioned in conjunction with research firm HIS about the native advertising market.

Mobile will be a big driver of growth in native ad spending: Native advertising will account for 63.2% of all global mobile display advertising by 2020, reaching $53.4 billion.

Consumers appear to engage more with native ads vs. standard banner ads and are more willing to share native ads than standard banner ads.

The research found that while first-party in-app native ads will be the biggest revenue driver, third-party in-app native ads will account for 10.6% of all mobile display ads -- or $8.9 billion -- by 2020.  Third-party in-app native ads will grow at an annual average rate of 70.7% between 2015 and 2020.

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For the purposes of its study, IHS used the Interactive Advertising Bureau and Mobile Marketing Association definition of native advertising: “Mobile native advertising is a format of advertising that takes advantage of the form and function of the surrounding user experiences, all of which are indigenous to the wide variety of mobile devices.”

The IHS research found that native ads are distinct from content marketing, which aims to match content and format. By contrast, native ads -- particularly those found on mobile devices – align with the context of and style of the site or app on which they appear.

Other findings include:

  • Consumers interact with native ads 20% to 60% more than they do with standard banner ads.
  • Native advertising spend will be $9.6 billion in Europe by 2020, with $1.3 billion of that third-party in-app ads.
  • Asia-Pacific is projected to see the biggest increase in native advertising spend in the next five years, with a 177% compound annual growth rate between 2015 and 2020. Native advertising spend will reach $14.1 billion in the Asia-Pacific region by 2020, with $3.6 billion of that third-party.
  • Globally, North America is the top region in third-party in-app native advertising.
  • Utilities, news and social apps are driving in-app native advertising.
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