A new study has found that old school digital ads are fast being replaced by native advertising – ads that look, feel and read like the content that surrounds them.
The study by news site Business Insider’s research division BI Intelligence found that by 2021 some 74 per cent of all ads in the US market will be native.
BI Intelligence said its research was based on data from the Interactive Advertising Bureau (IAB), PwC and global insights firm IHS.
The report found that it’s Facebook’s and Twitter’s prediction for native ads that is driving the growth in native, particularly native video ads.
The key takeouts from the report included:
• Native-display ads, including social native and native ads in-feed on publisher websites, will make up the bulk of native ad revenue over the coming five years.
• Native display ad revenue in the US will rise at a five-year compound annual growth rate (CAGR) of 17 per cent during this time period to eclipse $US36 billion. The rise of native video ads, particularly on social platforms, will be one of the main drivers of this growth.
• Social platforms generate most of their revenue from native ads and will continue to dominate overall native ad spending through 2021. Social platforms like Facebook, Instagram, Twitter, and Snapchat’s dominance on mobile devices, where the entire experience is within a feed, will help propel social’s contribution to overall native ad revenue through 2021.
• The report found that sponsored content, where an advertiser pays for a piece of content, will be the fastest-growing native format over the next five years. However, it also found that the high cost to produce these ads and the limitation in inventory could possibly be limiting to the format.