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.

UK Digital trends for 2014 (by eMarketer)

1) The Digital Audience: Multidevices change the Game

Smartphones and tables are now part of everyone's life. Smartphone penetration in the UK surpassed the 50% barrier, and tablet is already close to 40%.

Time spent in digital media is expected to surpass the time spent on TV during 2014, mainly driven by time on mobile devices.

UK kids are already using many devices to go online, so this trend is expected to become more and more important.

  

2) Ecommerce Pushes the Limits with Mobile

Customer journey has become more complex with mobile.

Trigger, research and purchase are now part of a complex journey through multiple touch-points and devices.

Mobile shopping and spending is increasing rapidly, but the device sales are mainly in big screens, such as laptops, desktops or, in a smaller scale, tablets.

3) Big Data—Much Talk, Little Action?

Although Big Data initiatives are increasing, the progress is estimated to be still slow in the next years.

The main reasons pointed out for the slow pace related with data integration and data crunching, namely:

• 47% cited lack of resources / time

• 46% had data in disparate systems / locations, or too much data

• 36% lacked useful data

• 30% had no suitable analytical systems

4) Real time advertising and content creation: Top agenda items for brands

The graph below shows that 20% of UK content marketers spent at least 50% of their budget on content marketing in 2013.

Social media was a major focus for content marketers, with Twitter and LinkedIn surprisingly surpassing Facebook in terms of usage.

Closing remarks
By all these interesting results, some quick ideas come to my mind

• Big Data seems to be a clear opportunity for new businesses - if companies have struggling with analysing their data why not outsource it?
• eCommerce is getting big, but mobile still presents some challenges. Are companies doing enough? Who will win this marathon?
• Content creation is the focus of marketers, how far can our imagination go?

Main sources:
http://vimeo.com/97252912
http://www.emarketer.com/Webinar/UK-Key-Digital-Trends-2014/4000085
http://www.emarketer.com/Article/UK-Key-Trends-2014-Ecommerce-Pushes-Limits-with-Mobile/1010762
http://www.emarketer.com/Article/UK-Key-Trends-2014-Big-DatamdashMuch-Talk-Little-Action/1010768
http://www.emarketer.com/Article/UK-Key-Trends-2014-Content-Creation-Top-Agenda-Item-Brands/1010773

The "Big Five" of Online Shopping

This article was adapted from Frank Fiore's book, TechTV's Starting an Online Business. Frank is a regular contributor to InformIT.


Customers expect your online business to offer the right combination of selection, price, service, convenience, and security. You don't? That's okay - you probably have plenty of competitors who are just a click away. Your customers can shop there instead. To paraphrase former U.S. President Bill Clinton, "It's the customer, stupid."

Shoppers don't care about your site, your business, or your life. What they care about is themselves. When they come to your site, they want to see if there's anything there that interests them. They want to know, "What's in it for me?" They come to your web store with a certain set of expectations. Your job as a web merchant is to meet those expectations.

Your customers expect to find what they came for: a fair price, a good selection of products, great service, and a secure and safe place to shop. In other words, they're looking for the Big Five of online shopping. And if they're from "out of town"—that is, another country—they're also looking for a site that speaks their language!
Everything on your site should be about the customer and designed from the customer's point of view. Your customer not only needs a reason to buy, but a way to buy easily and safely.

Customers want to know right away if their visit to your site is going to save them time and money, and if their shopping experience will be pleasant. Can they find what they want easily? Can they place an order in a variety of ways? Can they find your customer service pages, shipping and handling fees, and return policies without spending a large amount of time digging through your site?

These are the customer's expectations, and you have to meet them if you want your online business to be a success. Want to give live customer support to shoppers on your site? Don't want to spend the money for programming? Then use MSN, Yahoo! Messenger, or AOL Instant Messenger services. Shoppers can download the free desktop application and communicate with you in real-time if they have a question. If your site is designed with the Big Five of online shopping in mind, you'll provide your customers a pleasant shopping experience and a reason to buy from your online store again.

http://www.informit.com/articles/article.aspx?p=24037

Online Publishers Association Concludes Ads Are Most Effective On Content Sites

Recent research from the Online Publishers Association (OPA) uses brand metric data to conclude that ads placed on content sites (OPA members) get better results than those on portals or sold through ad networks. The conclusion is clearly self-serving and eMarketer suggests that it is common sense that content sites will deliver superior results to portals and ad networks because of content quality.

According to the eMarketer analysis, content sites deliver better results to advertisers because viewers are more likely to be engaged with what they are reading/watching. In comparison, visitors to a portal are more likely to be searching quickly through a variety of choices (e.g. - weather, email, headlines) and therefore less likely to become fully engaged with the content and the associated ads. eMarketer refers to this experience as a "fast-food" mentality.

While I agree with the above analysis, I think there's a fundamental issue that the OPA and eMarketer fail to address. While ads on content sites may be comparatively more effective in their impact (ie. - improved awareness, messaging, purchase intent) , what is really important is each medium's comparative ROI. To assess that, one needs to include price data and campaign objective data.

So while placing an ad on an OPA member site may result in greater impact for an advertiser, it will also be more expensive than comparable portal or ad network purchases. While purchasing ads on leading content sites may be a good idea for driving traffic to a targeted, high-value product, it may not be as appropriate for driving broad awareness of a mainstream dvd release.

Marketers know that there are many tools in the toolbelt when balancing their channel mix. There are pros and cons for choosing display vs. search vs. email vs. microsites. Likewise, there are pros and cons for the myriad of choices available within each channel.

For the OPA to issue its report about the benefits of advertising on content sites is no surprise. It's just necessary to put it within perspective. Successful marketers have to balance their campaign goals and budget with the available channel options.