All Eyes on Native Advertising, Despite Uncertainties - eMarketer

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All Eyes on Native Advertising, Despite Uncertainties

Some publishers, consumers are wary

May 16, 2013

Social networks, news sites, digital content aggregators and streaming media services are rife with ads that are integrated into the content experience. According to a new eMarketer report, “Native Advertising: An Emerging Consensus for a New Kind of Ad,” these so-called “native ads” are providing new ways for marketers to reach target audiences and new avenues of monetization for content sites that are under intense revenue pressure.

Although business prospects for native advertising are positive, the medium has its detractors. Some media executives and marketers are wary of the blurring of lines between content and advertising that occurs with native ads, particularly in the context of news sites. Others question the return on investment of these ads, arguing that native ads cannot scale for multiple placements.

US Social Media Ad Spending, by Type, 2012-2017 (billions)

And there is still the question of defining native advertising. Most perceive native ads as purchased ads that mimic content in the venues in which they appear. They are more entertaining and less interruptive than traditional ads, and hopefully popular enough to get shares.

Common examples of native ads include Facebook Sponsored Stories, Twitter Promoted Tweets, branded videos and other ads that appear in the content streams of media sites such as and BuzzFeed.

Native advertising platform Sharethrough conducted a survey of US media agency executives in late 2012 and found that nearly 50% considered native video ads to be more effective than conventional ads at hitting key performance indicators (KPIs). Slightly more than one-third of respondents said it was too early to tell which were more effective, and the rest said native ads were either equally effective or somewhat less effective than other ad types. It should be noted that Sharethrough is invested in native advertising and the sample size of its limited survey was 112 executives from 12 agencies.

Effectiveness of Native Video Ads Against Primary Key Performance Indicators (KPIs) According to US Media Agencies, Dec 2012 (% of respondents)

In terms of the audience’s reaction to native advertising, MediaBrix, an ad platform for social and mobile games, observed in October 2012 that a high percentage of US internet users found ads that appeared as content misleading.

US Internet Users Who Find Advertising that Appears as Content* Misleading, by Ad Type, Oct 2012 (% of respondents)

Despite the potential backlash against misunderstood native ads, media sites under monetization pressure are turning to native advertising to drive digital revenue. Notable examples include Forbes, The Atlantic and The Washington Post. Others such as CNN and Hearst have said they are considering it.

In April 2013, BIA/Kelsey estimated that native spending in the context of US social media advertising would climb to $4.57 billion in 2017, from $1.63 billion in 2012. In every year in the company’s forecast period, native spending will grow at a faster rate than display spending.

Whatever the unknowns surrounding native advertising, there seems to be no question that its role in the digital advertising ecosystem will only get bigger.

The full report, “Native Advertising: An Emerging Consensus for a New Kind of Ad,” also answers these key questions:

  • What is native advertising?
  • How does native advertising differ from content marketing?
  • What are the pros and cons of native advertising?
  • How much business is being done with these types of ads?

This report is available to eMarketer corporate subscription clients only. eMarketer clients, log in and view the report now.


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