Marketers are turning to native advertising to deliver content that blends with the experience of the website, are meaningful to the user, and can be shared socially. U.S. native-ad spending on social sites is expected to hit $2.36 billion, or 39% of total U.S. paid social ad spend this year, according to a report from market research company BIA/Kelsey. The report forecast that social native ad spend will grow 93% to $4.57 billion by 2017.
As one of the largest native advertising platforms that spends over $350M in annualized marketing spend, Nanigans understands why native advertising has taken off and how advertisers can benefit from greater awareness and effectiveness with ad formats and placements that are integrated into the native experience of the site.
Facebook is a prime example of this. Its Page post ad units, are arguably the most valuable brand real estate in the marketplace. They feature a large creative canvas, act like any other content shared by friends on Facebook, and are combined with the vast number of targeting options Facebook offers based on their unique data.
And don’t forget mobile. Time spent on social media is tipping from desktop to mobile, which has enormous implications for Facebook advertisers. On mobile, the News Feed is the experience and native advertising is the only type ad served.
For advertisers looking to step up their investment in native advertising in 2014, we’ve identified three core components for a successful native ad environment: creative, targeting and optimization.
1. Creative: Native advertising is about high quality creative featuring compelling images and a strong call to action that fits seamlessly into the customer experience.
2. Targeting: Appropriately targeted ads ensure that your creative displays front and center to the right audience at the right time.
3. Optimization: Effective optimization allows you to measure, predict and attribute downstream behavior such as purchase revenue to effectively scale performance with automation.
It’s not surprising that brands who have mastered creative, targeting and optimization are achieving their performance goals. A Nanigans study revealed that Page post ads in the Facebook News Feed delivered a 26x higher ROI than domain ads on the right hand side.
Facebook offers a model for effective native advertising with its powerful ad formats and scalable native advertising ecosystem. Facebook is one of the first to couple real-time bidding and native advertising by empower advertisers to retarget at the impression level by through Facebook Exchange with unpublished page post link ads.
For native environments outside of Facebook, native ads and real-time bidding are on a path to come together. MoPub, a Twitter owned mobile advertising exchange, has introduced a solution to allow the thousands of mobile app publishers on its exchange to use native advertising. As seen with Facebook Exchange, native ads perform better, rates increase and publishers can continue to enhance the user experience.
As the Native Advertising ecosystem matures, marketers are looking for more precise approaches to measuring and predicting campaign performance. While many digital advertisers try to minimize how much they spend to acquire a customer (CPA), they are only looking at the cost side of the ROI equation. By understanding the lifetime value of various audiences (how much you can earn off a specific customer) marketers can ensure they find their best customers and improve their ROI over the long run. We’ve found that marketers who focus on lifetime value and optimize their native campaigns based on true ROI by leveraging maturity curves and predicting purchase behavior over time are the ones profitably scaling budgets across desktop and mobile.
Native advertising is poised to be one of the big stories for marketers and consumers alike in 2014. It offers a real opportunity for marketers to engage and build trust among ad-fatigued audiences. The marketers who get it right will be set to take flight.