Native advertising has historically gotten a bad rap. John Oliver, host of Last Week Tonight, did a particularly poignant segment on why native advertising threatens the very fabric of journalism. In a recent study by the University of Georgia, "fewer than one in five users recognized native advertising as ads."
And yet, despite industry concerns, spending on native advertising is growing at a rapid clip. Globally, native advertising "is expected to almost double over the next three years, rising from $30.9 billion in 2015 to $59.35 billion in 2018," according to Adyoulike. In the U.S., Business Insider says, "Native ads will reach $7.9 billion this year and grow to $21 billion in 2018, rising from just $4.7 billion in 2013."
So what's fueling the substantial growth of native advertising? I sat down with Henry Lau, co-founder of Instinctive, a leading native advertising and content syndication firm, to better understand. He broke down the cause into three succinct drivers:
Instead of ads, consumers are actively seeking out great content in the form of storytelling. "When done well, native advertising provides real value to consumers," Lau explains. "By putting the consumer's needs first, brands are finding compelling ways to engage with the power of stories."
Essentially, companies are turning to the laws of attraction with native advertising rather than attempting to interrupt their audience. Great content will attract while aggressive ads will repel. This leads to the second driver of native advertising.
For these reasons, native advertising is a growing trend and likely to continue to be for the foreseeable future. So before you resign yourself to following the well-worn path of programmatic display advertising, consider what metrics are most valuable to your business. Are you looking for cheap impressions or are you looking for quality engagement time with your target audience?
Lastly, when it comes to the ultimate arbiter of success, native advertising is succeeding there too. In a recent Nielsen case study, native advertising drove "an overall 88.6 percent increase in brand awareness among those exposed to the campaign." Lau also notes that "beyond brand awareness, several of our clients are leveraging native advertising successfully to drive sales." These clients include Lenovo, NetApp, Jack in the Box, BlackBerry, and Sky.
The bottom line is that native advertising is a growing trend. While you need to follow the FTC guidelines to stay compliant, you're going to want to put more of your marketing dollars toward compelling content that can be featured via native advertising versus investing in a fire hose of tactics in an attempt to interrupt your audience.