• There's a huge shift underway, with social media ad budgets being reallocated to native ads. BIA/Kelsey projected that social media advertising would balloon into an $11 billion market in 2017, with native advertising representing 42% of that ad spend. However, BIA/Kelsey and other sources now believe native will account for an even larger share of spend.
  • In-stream native ads look, feel, and function seamlessly across mobile and PC, which is precisely what brands want, as they seek to build cross-device campaigns. Mobile ad spend was up 83% last year, to $8.9 billion globally
  • Facebook ads in the News Feed achieve 49-times higher click-through rates and a 54% lower cost-per-click than traditional placements in the right-rail sidebar, according to an AdRoll analysis of ad impressions traded through FBX, Facebook's ad exchange.
  • We believe image- and video-sharing networks such as Pinterest, Vine, and Snapchat will soon be offering the most effective types of native ads. Photos are the most shared type of content on the Web; 43% of global Internet users have shared a photo in the past month, says Ipsos.

Executive Summary

As more social media companies try to find ways to monetize their massive audiences, native advertising remains the preferred revenue model.

Depending on who you talk to, native advertising has many definitions. In the context of social media, we define native advertising as:

Ads that are seamlessly integrated into a user's feed and appear to be organic content.

bii native ad budgetBI IntelligenceThe move toward native reinforces mobile's increasingly central role in social media advertising. On mobile's smaller screens, the stream is the experience.

With native advertising, brands can pay to place relevant content in front of millions of consumers, without dramatically affecting the user experience. Users understand that in order to enjoy free social media services, they are going to need to see some ads, and native is the most elegant and natural of all online ad formats.

Twitter was the first [...]