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Native advertising continues to grow, but compliance issues remain

March 15, 2017 | By Todd Krizelman, CEO—MediaRadar @ToddKrizelman

Native advertising is a compelling and profitable way for publishers to offer custom ad opportunities in the form of articles, video, programmatic and sound. What’s more, it provides a creative outlet for marketers, resulting in increased demand and desirability for publishers.

With this in mind, we at MediaRadar felt it was important to take a closer look at native trends for a more thorough understanding of best practices, as well as channels. So we recently published a study that observes the native advertising trends that emerged in 2016. The study, “Leaders and Lessons in Native Advertising,” examines thousands of native ads from nearly 13,000 brands.

Here’s what we found:

37% of publishers are not native compliant. In December 2015, the Federal Trade Commission (FTC) released its first-ever native advertising guidelines. At that time, only 29% of publisher sites examined were compliant. That number has increased by 119% year-over-year, however, with 63% of digital publishers having modified their native advertising to adhere to the FTC guidelines. Still, it leaves 37% of digital publishers that aren’t native compliant.

610 new advertisers bought native each month. Adoption and demand for native ad content was extremely high, with an average of 610 new advertisers using native content solutions each month. And many of these advertisers are open to purchasing digital packages – not just native as a standalone. This is good news for publisher ad sales because native continues to drive bigger deals for more revenue.

An average native campaign runs for two months. Renewal rates and campaign duration for native remain low overall. Based on 2016 data, native renewal rates are at only 33% across all media sites. An even smaller portion of those – 20% – renew less than 20% of the time. The average native campaign duration is only two months. However, sites with more established native programs have a 49% renewal rate. This includes sites with native programs where more than 50 brands are placing native buys.

Media & entertainment is most popular category. The top-five categories in native advertising from January to December 2016 include:

  1. Media and entertainment (3,198 brands using native campaigns)
  2. Professional services (2,017 brands)
  3. Finance and real estate (1,246 brands)
  4. Technology (1,231 brands)
  5. Retail (1,153 brands)

Takeaways

Overall, there has become a greater demand for native advertising content. More publishers are familiarizing themselves with the FTC native advertising rules than ever before. However, there is still room for improvement, with more than one-third of publishers remaining non-compliant. And while the number of native ad campaigns continues to grow, renewal rates and campaign durations remain low.

Also, the media and entertainment industry is the most popular native advertising category, setting itself apart from the rest of the pack in terms of native ad adoption. But this may change in the coming years, as native becomes more popular and more industries begin regularly investing in native ads.


Todd Krizelman (@ToddKrizelman ) 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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