Why U.S. Businesses Will Spend $21b on Native Advertising in 2018
Something has gone terribly wrong with old-school digital advertising.
When Joe McCambley created the world’s first display ad precisely 23 years ago in October 1994, 44 percent of people, who saw it, clicked on it. Fast forward our times, the average click-through rate (CTR) has dropped to a measly 0.19 percent, and the decline has been going on for a long time.
Researchers were reporting instances of “banner blindness” way back in 1998. Here is an excerpt from a Rice University study, Banner Blindness: Web Searchers Often Miss ‘Obvious’ Links:
The banners used in this experiment seem like they should be very obvious to users. They are large, brightly colored, and stand out from everything else on the page. However, this study shows that they are frequently missed by the users who are specifically looking for the information they contain. Not only do the banners not jump out at these users and grab attention, they seem to be particularly ignored.
Almost two decades later, banner blindness remains prevalent. Recent data from Google shows that 56.1 percent of all ad impressions are not even seen by real humans.
As if human indifference didn’t constitute enough bad news for advertisers, technology is assisting consumers in creating virtual walls to keep ads at bay. In 2016, ad blockers were active on 615 million devices worldwide.
That’s not good news for small businesses who were counting on old-school digital advertising to increase sales. Most of them did not anticipate these two challenges:
- Ad blockers preventing ads from reaching out to the customers.
- In case an ad manages to get through a blocker, it will be ignored
This said digital marketing is not dead. Forbes predicts U.S. digital marketing spend to touch $120 billion by 2021. It is just that the old-school techniques are not as effective as they used to be.
To reap a high return on investment (ROI) from their digital marketing campaigns, businesses will have to adapt, and going native is one of the most profitable ways to go ahead.
What Is Native Advertising?
I didn’t think I would explain what native advertising was when I was writing the first paragraph. I thought that everyone already knew. I was wrong.
The moment I wrote native advertising in my Microsoft Word document in large letters, a colleague who was happening to pass by, stopped and asked, “Native advertising? Are you writing for the Cherokee or Navajo?”
– “No, sir. This has nothing to do with the Indians.”
– “What in the world is native advertising, then?”
I was silent for a couple of seconds, thinking how I could explain native advertising to someone who had no clue about it. His time is precious, so I had to be succinct. And here is what I came up with:
Native advertising is a kind of advertising that is indistinguishable from editorial content.
If you were to find a native ad on Forbes, the New York Times, or St. Petersburg Sentinel, except for a little “sponsored” tag, you wouldn’t even be able it distinguish it from the articles written by their editorial staff.
Native ads are written in tone and style similar to the other content on the platform on which they are published. And native advertising rarely sells stuff. It’s more useful for getting exposure, establishing trust, and building your brand.
Study after study has shown that native advertising is more effective than traditional digital marketing methods.
Data and Native Marketing
Image from: Business Insider
Some statistics from the Content Marketing Institute on how marketers perceive native advertising.
- 53% say it is extremely or very effective
- 90% agree that it can be used to build audiences
- 88% agree that it can be used to drive an action
- 85% agree that it offers valuable content to the reader and can be used to promote content marketing efforts
It doesn’t end at perception. Marketers are using native advertising for:
- Brand awareness (63%)
- Target/retarget customers in the sales funnel (41%)
- Long shelf life (39%)
- Building a subscriber base (39%)
- Producing deeper brand engagement (39%)
- Generating leads (39%)
- Reach targeted audiences across trusted channels (34%)
Why are marketers and businesses choosing native advertising over other forms of digital marketing?
It turns out; they have five compelling reasons.
Why Native Advertising Rocks
Contextual information, superior user experience, and value for money are primary reasons businesses are hopping on the native advertising bandwagon.
Superior User Experience
Your audiences consume more content from their mobile devices than desktops. Banner ads and some other forms of digital marketing are even more annoying on smartphones than desktops because those ads disrupt user experience. In contrast, native advertising is delivered in stream. It is like those ads you see in your Facebook or Twitter feed. You notice them, but they do not scream at you.
Do you sell books? A native ad on the New Yorker, Granta, or another literary magazine can propel your sales. Those websites have a large audience of book readers. Reaching out to them, when they are in a mood for reading, will make them more susceptible to persuasion.
Let’s take another case, and assume that you are a plumber in St. Petersburg. Now, if the St. Petersburg Sentinel, or another local news website, publishes an article on plumbing, you can ask Foxxr to write one related article for you and place it natively on the local website.
Pay to Play
Writing useful and engaging blogs is not enough. In a world where two million blog posts are published every day, you need to put in an effort to reach out to your audiences. Going native is one of the fastest and most powerful ways to announce your content. You pay for a guaranteed audience.
Native Advertising Works
These numbers from AdWeek will convince you:
- While the CTR on display ads is a paltry 0.19 percent, native advertising can propel it to a whopping 8 percent
- 57 percent of millennials are willing to check out sponsored online content, as long as it’s interesting
- Viewers spend as much time scanning native ads, as editorial content. Compare 1.2 seconds for editorial content against one second for native ads
- Native advertising can increase brand recognition up to 82 percent
Your Competitors are Going Native
With 90 percent of publishers offering opportunities for native ads, native advertising in the United States is projected to grow from $4.7 billion in 2013 to $21 billion by 2018. That’s huge. Your competitors are investing in native advertising. You cannot afford to be left behind.
The Internet has evolved in the past 25 years, so have the expectations of your customers. Old forms of digital advertising are not as effective as they were a few years ago. To engage consumers in 2017 and beyond, businesses need to adapt. Native advertising is one of the most profitable tools you can include in your digital marketing strategy. It doesn’t annoy consumers, millennials are more willing to engage with it, and it builds brand like few other digital marketing methods can.