For many advertisers, programmatic native feels like the holy grail. It brings the transactional efficiency, audience targeting and scale of programmatic to in-feed native units that match the look and feel of a publisher’s content. Additionally, publishers benefit by simplifying native ad sales, with instant access to demand sources through programmatic exchanges. Programmatic native offers real benefits to both sides – buyers and sellers.

However, with so much promise, what does the market look like today?

To find out, we at MediaRadar, took an in-depth look at what programmatic native advertising spend looked like in 2016. For the report, we analyzed programmatic native adoption over the last 12 months, identifying the number of brands buying programmatic native ads through popular exchanges, like Nativo, TripleLift, Sharethrough, Unruly, and Bidtellect.

Here’s what we found.

• More Than 4,000 Advertisers: Last year, almost 4,200 unique advertisers placed programmatic native campaigns across the native exchanges we analyzed.
• Adoption Grew 86% by Year’s End: Programmatic native surged throughout the year. In fact, the total monthly brands buying campaigns increased by 86% – from 593 in January to 1,133, by November. In Q1 2016 an average of 726 brands placed campaigns each month and by Q4 2016 the per month average leapt to 1,094 brands. This is meaningful growth over just a 12-month period.

• Still, Penetration Remains Low: In 2016, 50,605 advertisers placed online ads on just the top-200 largest publisher websites alone. As percent of that 50,605, fewer than 10% ran on native exchanges. This means that for all the significant growth last year, there is significant headroom for expansion in 2017.

Takeaways:

There has been a lot of attention given to sponsored editorial and programmatic native in the press in the past year. While the programmatic native market is still small, relative to the overall spend in the digital market, it is expanding and at an accelerated pace. Renewal rates and advertiser feedback are positive, mostly.

That’s not to say that challenges don’t exist (The Wall Street Journal tackled these issues recently), but we observe that the market continues to be a legitimately bright spot for publishers. We forecast a positive outlook for it in 2017.