Spending in traditional advertising is rapidly declining due to an increased shift towards digital. According to eMarketer’s latest ad spending forecast, digital will overtake TV ad spending this year for the first time. Additionally, the latest forecast from BIA/Kelsey states that while digital is surpassing traditional ad spending, the shift within digital seems to be towards local ad revenue. This shouldn’t come as a great surprise--looking back, advertisers have always had to adapt to new trends and technologies. In the end, these growing pains ultimately gives way to an advertising landscape that is more meaningful for consumers and brands alike.
But first, we need to look at why traditional methods are falling short.
A study from The McCarthy Group revealed that 84 percent of millennials do not like advertising. This generation does not trust anything that feels too “sales-y” and increasingly distrusts corporate brands. A quick way to fall into a customer’s bad graces is to deliver an ad that feels invasive and irrelevant. According to a study by Adkeeper and Real Media, desktop banner ads are perceived as intruders, with 61 percent of users saying they don’t click ads because they don’t want to be interrupted or distracted. Another study from BannerSnack found that 54 percent of users don’t click ads because they simply don’t trust them.
The problem is not so much with ads themselves, but the lack of targeting. No one wants to see an ad--of any kind--that has no relation to their interests. Ads that feel random or off-base are not only a waste of money—they can do reputational damage to a brand. Today, un-targeted advertising can seem annoying and careless.
In addition to the lack of targeting, we need to consider the prevalence of mobile. While online banner ads were the holy grail of advertising when they came out--much like other forms of traditional advertising--they have since lost steam and many question whether mobile is to blame.
To get through to today’s consumers, ads need to be more attractive, interactive, and thoroughly integrated with the digital products that customers already know and trust. The solution? Native ads.
Why do native ads perform better?
As proven in the aforementioned studies, the best kind of advertising is when customers don’t consider your ad intrusive or annoying--that’s what native ads promise. With native ads, advertisers can deliver highly relevant and engaging content without interrupting the standard app experience, as the ads follow the default visual in the app which it’s placed. These ads can take on the form of sponsored content in social media, as recommendation widgets or as promoted listings, among others.
Native ads perform significantly better for a variety of proven reasons. In fact, a report from Dedicated Media discovered that native ads are viewed 53 percent more than non-targeted banner ads. Perhaps more importantly, 52 percent of people who click on native ads have a higher purchase intent than those clicking on non-targeted advertisements. But why?
First, they do not look like advertisements. Sponsored updates and advertisements fit seamlessly into the social media platforms people already trust. A sponsored pin for a sweater on Pinterest in no way interrupts or comprises the Pinterest-browsing experience. Secondly, native ads provide brands with the capacity to reach more customers in the right place at the right time. According to MoPub, the number of apps with native ad inventory increased by eight times in 2015.
While these benefits impact the consumer, Placecast’s Native Ads offer re-usable and scalable content to create a great experience for the advertiser as well. Advertisers can create a single set of creative assets that can be dynamically re-assembled for various apps and native ad formats. Standardization allows advertisers to easily scale ad content across multiple publishers.
Localized Native Ads reach your audience in the right place, at the right time
Lastly and arguably most importantly, Placecast’s Native Ads product are unique in that they trigger higher viewer engagement by delivering relevant content based on location. While all native ads follow the default visual and functional experience of the app in which they’re placed, adding the location layer ensures that consumers receive highly relevant content based on where they are located.
Initial tests on Placecast Native performance are very promising. The chart below shows data from a test campaign for a Heath and Fitness Brand in the US where we ran both Banner and Native Ads. Comparison of the two showed that there was a 46% lift in the Store Visit Rate with Native ads, as well as a 43% life in click-through rates for the Native ads.
The chart above shows the comparison between banners and native ads for the same brand ad campaign. The test was done with limited campaign data, not on the same days.
Like all advertising, native ads can be ineffective if they do not reach the target audience. Placecast’s Native Ads product localizes content so that it is as relevant and un-disruptive as possible. Like our other offerings, It only delivers content to users within a geofenced location to not only ensure precise targets, but to also allow for content that melds fluidly with the app. Advertisers can personalize every aspect of the ad content, including location by region and neighborhood to current day and related promotion, allowing for more granular control over every aspect of the ad content.
Thirty-three percent of internet users find desktop display ads intolerable, according to Adobe, and other classic forms of advertising are projected to decline or remain relatively flat through 2019--this includes newspaper, magazine and radio advertising. As digital marketing has become more accessible and affordable, brands are finding better digital substitutes for traditional forms of interaction and entertainment, such as social media, video streaming services, and apps. They are also finding better ways to ensure their content reaches the right audience. Advertising never stops evolving, and the next big step is native advertising.