INFOCUS

The hottest companies in native advertising

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Native advertising is not a new concept. Custom content, advertorials, and product placement strategies have long been in the advertiser's toolbox to help drive brand awareness and user engagement. Yet the discussion around native advertising has grown steadily in the last couple years and is strikingly more pronounced in 2013.

Why now?

If banner ads were successfully promoting branding messages for marketers, native advertising would not be receiving the attention that it is. Advertisers simply aren't seeing meaningful brand lift for the vast majority of their banner advertising campaigns.

The advent of real-time bidding has improved the efficiency of digital media buying by an incredible margin. But this efficiency has come directly at the expense of the publisher. One could very reasonably argue that this is simply a more efficient use of media dollars, but the issue is that this hurts the publisher's bottom line. Native advertising offers publishers a new alternative to the ever-declining CPMs of banner advertising.

Mobile also presents a complex challenge for publishers. Users rarely intentionally click on ads generally -- and mobile ads show a strikingly high rate of accidental clicks. Articles are often zoomed to exclude advertising content on the sides. And Flash, the software language used for most ads, simply doesn't work on most mobile devices. But mobile represents a growing piece of a publisher's traffic -- often directly at the expense of desktop browsing.

There is no single reason for why native advertising is at the forefront now. Rather, poor banner ad engagement and declining CPMs incrementally stress publishers to consider alternative monetization sources. Mobile and tablets make banner ads less relevant for the future and require considerations for alternative revenue streams. Technology is finally getting to the point where native advertising can be scalable across multiple publishers without requiring unique content for each.

eMarketer estimates sponsorship spending in the U.S. will rise 22.1 percent this year. By 2017, spending is expected to exceed $3 billion, and much of the growth will come from ad publishers seeking revenue from native executions.

Native advertising comes in all shapes and sizes. Here is a snapshot of the native landscape today. This chart is organized by the medium of content, or how that medium is powered. The most saturated sector of the market in terms of discussion today is sponsored posts and articles, but there are many other emerging forms of native advertising that are changing the game.

The hottest companies in native advertising

Click to view larger version.

As you can see in the above infographic, certain parts of the native landscape are becoming quite populated, while other spaces are still wide open. Let's take a look at some of the biggest players in each area.

 

Comments

Wade Kingston
Wade Kingston June 4, 2014 at 12:03 AM

List has changed a lot in the last year. Now it's impossible to think of native ads (especially native mobile ads) without seeing Facebook, Airpush, and Twitter. They're the big boys in this game now with a ton of smaller players coming into the market now. Should be a much more crowded pool in another year.