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Six things we now know about native advertising

November 2, 2016 | By Todd Krizelman, CEO – MediaRadar @ToddKrizelman

It has been a few years that native advertising is being actively placed in the market. With the year-end approaching, it’s a good time to take stock of what we now know. At MediaRadar, we’re now not just tracking native ads, but also studying how native is bought & sold, and are coming to a view of what is best practice. Posted below are some of our key findings.

  1. Native, a saturated market? Surprisingly the market is not yet saturated. Over Year 2016 we’ve tracked a median of 610 new advertisers buying native, for the first time ever. This is substantial. And we’re finding native ads across b2b, enthusiast, regional, and science media. Native is no longer for certain large consumer sites.
  1. Renewal rates. To provide an average here would be misleading. In fact what we see is polarized renewal rates. Out of the ~1000 websites that sell native, most have low renewal rates, under 30%. This is going to make scaling up native advertising a significant challenge. In contrast, there are a few dozen firms that are very focused on client success. They enjoy renewal rates above 70%. This includes some of the best performers, including brands like Quartz (QZ.com).
  1. Campaign packaging. We observe that it’s exceedingly rare to see native advertising running stand-alone. It’s much more common that native advertising runs as part of a broader campaign. The most common campaign is to run display for 30 days, then 30 days of both native and display, and then a final month of display.
  1. Duration analysis. Across 16,998 brands that have placed native over the past 2 years, the most common is one month only. It’s surprisingly brief. Just under 20% of brands are running campaigns for six months.
  1. Programmatic vs. Direct. In the past two years we’ve seen the rise of programmatic native – both display and in video. Without question, the product is marketing different than direct native. Programmatic native is display advertising that looks-and-feels like editorial. However, these ads don’t typically link to sponsored editorial. In contrast, direct native does. This is the kind of programming that Buzzfeed, Forbes, and Huffington Post are especially so well known for. Posted below is an overview of the massive growth we’re seeing from some of the leading programmatic native companies. This includes name native exchanges such as Nativo, TripleLift, Sharethrough, Bidtellect, Teads, Unruly, and Giant Media.
  1. Recommendation. Native advertising renewal rates correlate tightly with campaign duration. Those winning six-month deals have the highest average renewal rates, with the lowest renewal rate variance. In surveying those most successful publishers we heard consistent feedback: Require clients to commit to longer term deals. This gives you, the publisher, more time to course-correct, to respond to client needs, adjust creative, adjust marketing support, to absolutely make sure that you’re helping the client meet their campaign objectives. This, more than anything, drives up renewal rates.
Number of programmatic advertisers placing in the year 2016
Number of programmatic advertisers placing in the year 2016

Todd Krizelman is Co-Founder and CEO of MediaRadar (@MediaRadar). Growing up near the epicenter of technological innovation in Palo Alto, California encouraged him to become an entrepreneur and co-found of one of the world’s first social media sites, theGlobe.com. Krizelman also held leadership positions at Bertelsmann’s Gruner + Jahr and Random House. With his expertise in ad sales and innovation, Krizelman joined veteran web architect, Jesse Keller, to found MediaRadar in 2007.

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