US Native Digital Display Advertising Forecast: Social Dollars Drive the Market—for Now

Executive Summary

With native display ads expected to account for more than half of all US digital display media ad spending in 2017, it’s clear that such formats are becoming an essential part of the ad toolkit. Advertisers will spend $22.09 billion on native this year alone.

• Driven by publishers’ pursuit of higher-value and more mobile-friendly inventory, as well as advertisers’ demands for more engaging, less intrusive ad units, US native digital display ad spending will rise 27.9% in 2018 to $28.24 billion.
• Social advertising, most of which can be classified as native display, is largely responsible for native’s healthy growth. In fact, native ads on Facebook, Twitter and other social networks will account for 84.2% of total US native display ad dollars in 2017. That share will fall slightly to 82.2% by 2018, as nonsocial forms of native—specifically in-feed and sponsored content—grow more aggressively in the next year.
• Greater adoption of programmatic advertising among buyers and sellers will be a significant driver of in-feed native advertising. Across the broader programmatic category, the API-based buying common to social platforms will account for most investment. Still, nonsocial programmatic will grow at a faster rate, though from a much smaller base.
• Native display ad spending on mobile will far outweigh that on desktop, with nearly nine of every 10 dollars expected to go to mobile by 2018. Here again, social—already heavily mobile—is greatly skewing investment.