Some 83% of advertisements running on Facebook's Audience Network are native, with more than 50% of the apps on the network using native advertising units exclusively, rising sharply in the past year. More marketers have begun to tie native ads to search campaigns, attracted by the images and ability to buy the media through programmatic channels.
Along with the trend toward mobile, marketers tell Search Marketing Daily that images in ads have helped Facebook dominate the mobile display market in which the report now estimates takes 44.3% of the global market share.
Native in-stream ads will drive $53.4 billion in revenue by 2020, and contribute 63.2% of all mobile display advertising, primarily driven by in-app native advertising, which recorded revenue of $13.6 billion in 2015. The report suggests that the growth of native is linked to the rise of Facebook in-stream ads.
The study, conducted by IHS, includes more than 70 interviews with industry experts from publishers and app developers, agencies and advertisers, trade associations, ad tech vendors and networks in 25 countries. It focuses on in-app mobile display native advertising and did not consider content marketing and mobile paid-for-search in its findings.
The key findings include:
1) 75.9% of all online display advertising revenue will be mobile at $84.5 billion by 2020.
2) 63.2% of mobile display advertising will be native, which will make up $53.4 billion in advertising revenue by 2020
3) Third party in-app native advertising is growing quickly. It is forecast to rise at a 70.7% compound annual growth rate between 2015 and 2020, amount to $8.9 billion and account for 10.6% of mobile display advertising.
4) North America is the leading region in third-party in-app native advertising both in absolute and relative terms
5) APAC will record the largest increase in the next five years at a 177.0% CAGR between 2015 and 2020.
6) Utilities, news and social apps are the champions of in-app native advertising, while games are more hesitant to adopt new ad formats.
7) The key challenges to adopting native advertising by app developers and publishers are: lack of awareness of native ad formats, restricted infrastructure and technology, limited scale, low sophistication of native ad formats, and no universal pricing and measurement