Market demand is the biggest obstacle to increased business in native advertising, according to half of premium publishers recently surveyed by Polar. But, on the other side, high-level US marketers and agency advertising decision-makers surveyed by Purch say demand is growing, and they expect their native advertising spending to triple by 2015. Despite the enthusiastic outlook by these decision-makers, who spend at least $1 million on digital advertising, several challenges remain. The most commonly-cited challenge is insufficient reporting and ROI metrics (46%); indeed, the Polar survey finds that “there is no consistency when it comes to success metrics for a native campaign,” with publishers analyzing various metrics. Some of that may relate to advertisers having both branding and performance goals: roughly 7 in 10 native/sponsored content advertisers count branding as a main objective, while almost two-thirds cite sales and conversions as a top priority, according to the Polar survey.
Meanwhile, other challenges cited by advertisers include misalignment between the campaign and marketing objectives (38%), required time and resource commitment (26%), and native programs being insufficiently turnkey (24%).
The study also notes that advertisers prefer in-feed sponsored content that is consumed in an editorial-like environment on the hosting site rather than in-feed campaigns that link to an off-site landing page.
Currently, about 4 in 10 premium publishers are pricing their native ad programs as sponsorships, while roughly 1 in 5 price them on CPM/CPE (cost per engagement) basis, per results from the Polar survey. The remainder use a mix of those pricing models. About 8 in 10 use paid content amplification to increase the reach of their native ad campaigns.
The Polar study also reveals some interesting performance-related benchmarks, based on aggregate data within MediaVoice, its native advertising platform:
- Headlines with numbers are twice as likely to generate a click;
- The best click-through-rate (CTR) performance is observed for headlines between 40 and 60 characters in length;
- Native promotion of sponsored content has a 35% higher CTR when it appears above the fold;
- Light and subtle background shading colors tend to work better than prominent background shading colors, and a subtle change in the label font color appears to perform better than a prominent font color change;
- Native ads labeled in a font style that’s consistent with the rest of the site have a 64% higher CTR than those with a unique font style;
- An information button does not appear to decrease the unit’s performance;
- Native ad CTRs are 50% higher on mobile compared to the same unit on desktop;
- Consumption of sponsored content is 2 times longer on tablets and 2.5 times longer on smartphones than it is on desktops, for the same content; and
- Referral traffic spends 62% more time with sponsored content than direct on-site traffic.
Some of those results suggest that the more closely aligned the native unit is with the publisher’s content (on a style basis), the better it will perform. (That is, of course, one of the key complaints about native ads.)
Native ads will next year overtake display and generate the majority share of social ad revenues in the US, according to a recent forecast from BIA/Kelsey.
About the Data: The Purch study was conducted in Q1 2014 among high level U.S. marketer and agency advertising decision makers, spending $1 million or more on digital advertising. The Polar survey was conducted in late May/early June among just over 100 premium publishers in the US, UK and Canada (though mostly in the US).