Advertisers aren’t just ‘dipping their toe’ into native advertising. They are diving in and taking publishers along for the swim with revenues expected to grow by 127 per cent in the next three years, according to a recent report on the state of native advertising. Piet van Niekerk reports.
Published at the end of last month by INMA the report Native Advertising Trends 2016: The News Media Industry draws its conclusions from data obtained from 156 media executives in 48 countries.
Authors Jesper Laursen, founder of Native Advertising Institute, and Martha L. Stone, CEO of the World Newsmedia Network, describe the report as “the first ever global survey on the topic in the news industry”. They conclude that native advertising poses lucrative potential in the news media sphere, and have gone into some detail to quantify their findings.
- 48 per cent of news media executives admitted that native advertising is already part of their advertising options, with 25% saying they are likely to use it soon;
- 76 per cent said they were feeling positive towards the use of native advertising; and
- 89 per cent said they considered native advertising important for the future of their companies.
To add some perspective to the above findings, the Native Advertising Institute in collaboration with FIPP found in their native advertising survey conducted earlier this year that magazine publishers projected 33 per cent of all overall revenues would come from native advertising by 2018 (compared to 19 per cent in 2015).
The Native Advertising report backs this up and despite the widely held perception that native advertising is principally a digital phenomenon, publishers predict print-based native advertising to grow almost as much as online. In fact, they expect 36 per cent of native advertising revenue to be generated by print in 2018.
Despite the concerning finding that seven per cent of news media publishers admitted to publishing native advertising without labelling it as such, the overwhelming majority of media publishers consider labelling native advertising as essential to help the audience to distinguish between paid-for and independent journalistic content.
Audiences are also warming up to native advertising, claim the authors. The duo quote a study conducted by the University of Antwerp and Belgian publisher De Persgroep, which found 86 per cent of readers were “OK with native advertising” while some studies even showed “higher click-through rates on native advertising than on traditional banner ads”.
Some native advertising surpassed independent journalistic content as “most read” but it was clear that audiences preferred content that is relevant, valuable and engaging. The Native Advertising Institute report also found that while social media was initially “a powerful ally” in the acceptance of native advertising, many brands today realise that “paid distribution on somebody else’s platform is the fastest and most effective way of getting in front of a desired audience”.
The report concludes that after a few years of “dipping their toe in the water”, many brands have finally decided to “jump in deep”. In just three years, native advertising revenue is projected to grow by 127 per cent. Consequently, advertisers are starting to allocate significant slices of their budgets to native advertising initiatives.
In response, publishers are following the trend. According to the report: “To take advantage of the budgets going into native advertising and actually be able to provide advertising solutions that work, more and more publishers are jumping on the native ad train. One in three have already established an actual devoted native ad studio.”
This has brought about a new focus on developing effective native advertising solutions. “Publishers are well aware that if native advertising is to be a long-term solution, they must deliver tangible business results to the brands. And they need to prove it. Publishers are developing measuring tools and are avoiding pitfalls like telling brand-centric stories without real value to the reader.”
According to the authors, for native advertising to be successful, there are a few core principles that need to be adhered to. First off, full disclosure is inevitable. Neither the audience nor the authorities will accept any form of misleading or even missing declaration of what kind of content they are consuming.
Some publishers and brands are still not fully transparent and need to follow best practices for labelling. Second, real stories need to be told. Brands are having a difficult time converting from brand-centric marketers to acting like value-adding publishers. For native advertising to work, campaigns should include relevant, valuable, and engaging stories.
Finally, revenue returns needs to remain at the core of native advertising. No matter how good the stories are, and no matter how many readers or viewers they attract, no brand will continue to fund content endeavours if the commercial strategy is not solid and effective.
What is native advertising?
For the purposes of the survey to write ‘Native Advertising Trends 2016: The News Media Industry’, the authors drew on the following definition of native advertising: “Native advertising is paid advertising where the ad matches the form, feel, function, and quality of the content of the media on which it appears. Frequently this advertising content topic is not directly about the advertiser’s brand, but rather is about a tangential or supporting topic or topics that may create a ‘halo effect’ on the brand.”