Marketers are Increasing Spend on Native Advertising – But Disclosure, Ethics and Measurement are Key Issues

Native Advertising spending is set to substantially increase as marketers rapidly enable the strategy. Sixty-three percent of marketers are planning to spend more on native advertising over the next year according to the ANA’s (Association of National Advertisers) 2015 survey report “Advertising Is Going Native.”

In native advertising marketers position their message in the context of the user’s experience. The ANA survey of 127 client-side marketers, which took place in the 4th quarter of 2014, examined marketers’ native advertising, utilization, budgeting, interior and exterior implementation, measurement processes, and importantly the perspective on disclosure and ethics issues.

Key findings from the study include:

• Budgets for native advertising are increasing
• Native advertising is one of the hottest and most controversial trends in the industry. Almost three in five (58 percent) say their company used native advertising during the past year.  Concurrently, spending on native adverting is increasing.
•     Past year budgets increased for 55 percent of respondents.
•     In 2015, 63 percent of respondents expect to increase budgets allocated to native advertising.
• Despite the spending increases, native advertising currently accounts for a small percentage of overall advertising budgets — 5 percent or less for 68 percent of respondents.
• Native most commonly associated with digital and social
• Native advertising is most commonly associated with digital/online and social media, and usage is highest across both. Eighty-five percent of respondents who engage in native advertising do so via digital/online publishers, and 71 percent through social media.
• Disclosure and ethics are key issues.
• Two-thirds of respondents agree that native advertising needs clear disclosure that it is indeed advertising. Only 13 percent feel that such disclosure is not needed. Both the publisher and the advertiser have a responsibility to ensure disclosure. Three-fourths of respondents feel that there is an ethical boundary for the advertising industry when it comes to native advertising.  Disclosure/transparency is the single biggest issue about native advertising that keeps respondents up at night.

Contextual relevance main benefit

The main benefit of native adverting is the ability to create extremely relevant associations between the brand and consumer via content. Given today’s media landscape where consumers can increasingly avoid ads, advertisers look to native advertising to get their messages noticed and acted upon.

Broad supply chain expertise

Many external resources have roles in helping marketers manage native advertising: media agencies, media owners/publishers, creative agencies, specialized digital agencies, public relations agencies, and content marketing agencies. Media agencies have the highest incidence of usage and are identified as the “most valuable” resource.

Measurement concerns

Measuring the impact of native advertising is a challenge. Multiple metrics are employed, but no metric stands out as “most important.” There are concerns that measurement challenges could impede further growth of native advertising. The industry needs a deeper relevant set of metrics that provide greater insight for native advertising effectiveness.

Bob Liodice, President and CEO of the ANA commented: “Native advertising is proving to be a win for marketers, consumers, and publishers. Marketers win because their messages have a better likelihood of being seen and read versus traditional advertising. Consumers win because marketing messages have more contextual relevance than traditional advertising. And publishers win with the business development potential. However, consumers must be able to tell the difference between native advertising and editorial. As such proper disclosure is mandatory. Marketers have a responsibility to be transparent to maintain trust, and they must play a lead role in working with publishers to ensure proper disclosure.”