NativeAdvertisingRevenue(US)BI Intelligence

Key Points

  • Native advertising — ads in which the format and tone match that of a publisher's original editorial content — is attracting significant spending. Revenue in the US from native ads on both desktop and mobile will see a compound annual growth rate (CAGR) of 35% between 2013 and 2018 and reach $21 billion in 2018, according to BI Intelligence estimates based on 2013 data from the Interactive Advertising Bureau (IAB) and BIA/Kelsey.
  • Social networks will draw a majority of native ad revenue between 2013 and 2018. Spending in the US market on social-native ads, including Facebook News Feed ads and promoted tweets on Twitter, will grow to nearly $12 billion in 2018, seeing a CAGR of 32% from $2.9 billion in 2013. 
  • Native display ads, like the splashy native ads on Yahoo's news pages and apps, will see the fastest ramp-up. Native display is quickly gaining popularity among advertisers and publishers. Native-style display ad revenue will top $5.7 billion in 2018, up more than five-fold from $1 billion in 2013, a five-year CAGR of 42%.
  • Sponsored content has also attracted considerable attention. Spending on sponsored content, which often comes in the form of sponsored news stories and section sponsorships, will rise to nearly $3.4 billion in 2018, up by a five-year CAGR of 33%, from $800 million in 2013.
  • Native ads perform better than traditional display. This is particularly true on mobile. Desktop native click-through rates (CTRs) averaged a respectable 0.15%, while native-mobile ads had CTRs over 1%, according to recent data from Polar Media Group and Celtra, respectively.
  • Consumers hold a generally positive attitude toward native advertising, according to survey data, even as some media pundits insist that it deceives audiences. Advertisers and publishers must ensure that ads are relevant and are purchased by trustworthy brands to maintain positive perception and credibility and to avoid the risk of any mainstream backlash. 

Introduction

Digital native ads are one of the hottest marketing vehicles in digital media, and advertisers and publishers are taking notice. Native advertising aims to empower marketers with the same stylistic [...]