Native Advertising Projected for Large Growth

Emarketer, a leading market research firm, released its most recent projections for native advertising spending in 2015.  According to the firm, marketers will spend nearly $4.3 billion on native advertising alone in 2015, which is a 34% increase over the comparable 2014 figure.  This value is expected to grow all the way to $8.8 billion by 2018, which would represent a near 27% compound annual growth rate.

Major marketers including Ford, GE and HP all conveyed to Emarketer their enthusiasm for native advertising and their intent to significantly increase their ad spend devoted to this format.  In particular, marketers said that this shift of resources is driven by a growing feeling that traditional banner and search ads are not particularly effective tools, and that customers have grown accustomed to looking past those ads.  As a frequent consumer of digital marketing, I tend to agree that the old forms of display advertising are not very effective.  I see 100's of those ads per day, but it is near impossible for me to tell you who are the advertisers "reaching" me via that medium.  Where I differ with the brands is on the effectiveness of native advertising. Personally, I am not a large consumer of native content, but I believe that it can be a much more natural and seamless integration of brand messaging to consumers.  What is uncertain is whether or not it represents a good investment.  Clearly the marketers are of the mind that is an effective marketing tool, and thus the shift of ad dollars.

One last piece that is particularly interesting around this issue is that native advertising is no longer exclusively the domain of new media outlets.  Venerable publications like The New York Times and Wall Street Journal have begun to create departments that are focused on native advertising, which represents a meaningful departure from their traditional policies of keeping content separate from publication economics.  It will be interesting to see if this blurring of the lines of content and advertising is handled effectively by these publications, or if there is some hit to the legitimacy of their traditional content.  In many ways publishers are forced to adapt themselves in order to meet the demands of the marketplace, and in this case it is clear that the market is demanding native advertising.  In the next few years it will be interesting to see if old publishers are able to effectively integrate this new format into their businesses.