“We’ve been tracking a shift in ad-buying behavior where native advertising is moving from an experimental strategy to more of a core strategy,” Giant Media’s VP of Operations Ben Arnold said. “It’s clear that the brands that have tried native advertising were pleased with the results, which is why they’re increasing their spends, and this validation seems to be encouraging late adopters to join the party as well.”
Armed with fresh budgets and new campaigns, agencies and advertisers are making native ads a more significant piece of their branding plans. Last May, Business Insider projected that native ad spend would reach $21 billion in 2018, up from just $4.7 billion in 2013.
Giant Media commissioned a survey of agencies in Los Angeles and New York to find out where those new ad dollars are coming from and where they will be spent in 2016. Predictably, social media advertising led the way, but native came in a close second with almost 7 out of 10 respondents planning to implement some form of native advertising this year. Those who have used native advertising previously appear to have gotten the results they are looking for; 86% indicated they will spend more on this format in 2016.
Advertisers previously using more traditional advertising tactics have taken notice of the native opportunity and are willing to move dollars from other marketing channels. For example, 68% of respondents will decrease their email advertising budgets this year, which is in stark contrast to the anticipated spending increase on native.
Other survey findings:
- Of agencies and brands surveyed, 68% plan to use native advertising in 2016, coming in just behind social media marketing at 75%.
- Cost was the most important factor when choosing a native advertising platform (58% of respondents) followed by “reach/scale” at 55% and “publisher network” at 50%.
- Roughly one-third of respondents also indicated that content creation capabilities were important when selecting a native provider.
- 65% indicated that the biggest pain point in dealing with native advertising is the “difficulty to track/lack of reporting”.
- 64% said there are “too many moving parts/too customized”.