November 22, 2016 | Marketing
Within the digital advertising arena, traditional display ads and banner ads are quickly losing their effectiveness, with the average click through rates (CTR) falling to 0.17%. However, digital marketers are quickly adopting a new type of digital advertising tool known as “native advertising” to leverage its benefits and engage with the ever-increasing number of internet users.
According to the Interactive Advertising Bureau (IAB), native advertising is “paid-for content that is relevant to the consumer experience, is integrated into the surrounding content and is not interruptive.” Consumers are more likely to engage with a non-interruptive, sponsored article that provides them with relevant new information than with a traditional banner ad, and they are more likely to share it with friends. Consequently, native ads enjoy much higher CTR and conversion rates, as they offer visitors more than just an attempt to make them buy a product or a service.
Therefore, the key to success with digital advertising is using native advertising to deliver engaging content that provides value to the reader. Unlike straight display advertising that affords a very short window of time to grab attention, native ads provide the potential of longer user engagement.
According to BI Intelligence, native advertising will account for 74% of total display ad revenues by 2021, up from 56% in 2016. BI Intelligence also finds that spending on native ads will grow to $21 billion by 2018.
Apart from effectively engaging with consumers and increasing the CTR and conversion rates, native advertising is also seen as an avenue to mitigate some of the major challenges that digital advertising is facing today, in the form of ad fraud and ad blocking.
According to a survey by Adobe and PageFair, 28% of people in the U.S. who use the internet browse the web with ad blocking enabled. Ad blocking tools such as AdBlock Plus have averaged 2.3 million downloads a week since 2013.
According to a study conducted by the Association of National Advertisers (ANA), fraudulent web traffic in the form of bots is set to wipe out 7.2 billion U.S. dollars globally by the end of 2016.
Also, as per a study conducted by comScore by the end of 2014, it has been estimated that close to 54% of the ads were never shown to a human visitor, while still being counted as impressions by publishers.
When executed well, native advertising can not only deliver a targeted, relevant experience that will enhance brand awareness and generate new prospects, but also help advertisers overcome challenges like ad frauds and ad blocking.
Until recently, only the largest social platforms in the world monetized with native, in-feed ads, including Facebook, Twitter, Instagram, and Tumblr. However, the publishing industry is quickly following suit, as companies such as Time Inc., Forbes, Wall Street Journal, The New York Times and USA Today continue to introduce new advertising integrations on desktop and mobile that match both the form and function of their editorial feeds.
As more advertisers become aware of the huge potential of native advertising, companies like Revcontent, AdNow, Taboola and Outbrain help advertisers realize high rates of CTR and conversions, as well as mitigate challenges like ad fraud and ad blocking. Going forward, advertisers should focus more on engaging with consumers through native advertising ꟷ the advertising industry’s answer to obtain high ROI while tackling ad frauds and ad blocking.