Native advertising is flourishing across social media, content portals, news properties, video-sharing sites and streaming services. Increased mobile use of these venues has fueled much of the growth, since native ads work best in the content streams that people tend to access on smartphones and tablets, according to a new eMarketer report, “Native Advertising: Difficult to Define, but Definitely Growing.”
Perceptions about what constitutes native advertising are as varied as the ads themselves and the places where they appear. There’s still disagreement over basic terminology such as “native advertising,” “sponsored content” and “branded content.” Some make distinctions among those terms, while others use them interchangeably.
However, perceived effectiveness is fueling marketer investment in native advertising. In December 2013, BIA/Kelsey estimated native ad spending on social media alone would grow from $3.1 billion this year to $5.0 billion in 2017. As a percentage of total social ad spending, it projected native would rise from 38.8% in 2014 to 42.4% in 2017.
For media publishers, native advertising represents an opportunity to reverse the tide of flat or declining revenues. eMarketer estimates US print ad spending will decline from $32.16 billion in 2014 to $31.29 billion in 2018. Digital ad spending on newspapers and magazines will increase to $8.41 billion by 2018, from $7.48 billion in 2014, but these gains will still leave the industry essentially flat for the forecast period. With these numbers as a backdrop, it’s easy to see why media companies are so eager to create new revenue streams through native ads.