IAB (Interactive Advertising Bureau) has released (May, 2019) its 2nd report on native advertising (IAB Native Advertising Playbook 2.0).
At GreedyGame, we studied this report at length (10 days, 5 hours and 32 minutes). The report details how the native landscape has evolved from 2013 to 2018. The report is so extensive that we decided to break the report into a 3 part-series for us to do justice to the report.
In this 3 part-series of blogs, we will cover
– Introduction to Native ads and its current place in ad-tech industry
The Interactive Advertising Bureau (IAB) is an advertising business organization that develops industry standards, conducts research, and provides legal support for the online advertising industry. Its membership is comprised of more than 650 leading media companies, brands, and the technology firms responsible for selling, delivering, and optimizing digital ad marketing campaigns. In affiliation with the IAB Tech Lab, IAB develops technical standards and solutions. Founded in 1996, IAB is headquartered in New York City.
Significance of the report?
Since native ads technology is emerging, a clear definition and classification is important to establish which becomes the job for IAB. The 1st report has given strong fundamentals, while the 2nd report has refined those fundamentals further.
What is native advertising?
According to IAB, Native ad units should make viewer feel that the ad belongs within the content on which its displayed.
This is done by customizing 4 parameters-
Content – ad cohesion with page content
Design – matching with the environment
Behaviour – of ad unit is consistent with platform
Location – in-feed or out-of-feed
Based on these parameters, we need to define native ads, differentiate native ads from standard ads and even differentiate native ads from other native ads.
Example of Native Ad
Why use native ads?
1. Common belief would say that native ads should be looked at replacing one of the existing formats. Like other formats, whenever you add another ad slot, you cannibalize your revenue.
We at GreedyGame, have realized that if we focus on app/game UI and user flow when defining native ads, they can create a completely new source of revenue without disturbing your existing revenue i.e. make more revenue from the same set of users.
The game developers we have worked with, we’ve seen an uptake of more than 30% in revenues.
2. Native ads also lead to increase in the engagement of the user.
GreedyGame data shows that native ads when placed well, improve overall retention of user as well as increase engagement rates.
When ad templates are updated periodically to prevent ad blindness and templates are dynamic to change as per content, users have given more notice to the ad.
Current trends in native ad-tech industry?
Programmatic bidding has matured enough for native ads with integration in OpenRTB protocol by IAB, enabling native ads to scale. In 2019, 63% of total display ad spent is native (more info in chart), of which 82.5% (in 2018) was done programmatically.
There has been an explosion of content studios with almost every publisher with dedicated content studio team for native advertisements. In 2013, native ads were a new ad-format, still for experiment but in 2018, have become a mainstay.
Social media as a share of total digital revenue has increased 393% since 2013, and now represents 25.2% (10.4% in 2013) of all digital ad revenue (FY 2017, IAB/PwC Internet Advertising Revenue Report). This is crucial for native advertising as in 2018, almost three-quarters of US native display ad spending was on social ads.
Mobile advertising is on the rise. Mobile penetration is lead by mostly 3rd world countries like India, Nigeria etc., though 1st world countries also are showing impressive growth given their already strong user base. Mobile revenue has skyrocketed to $88 billion (2017-18), a 105% growth since 2013. Also in 2018, more than 90% of native ad spent was in mobile placements (eMarketer).
Since 2015, talks about blocking native ads as they deceive user by blending themselves, have been subsided now due to strong notice by native ad industry. Strong ad disclosure guidelines by IAB and FTC for transparency and concepts of LEAN/DEAL ads have been introduced in this report (more on that in Part-3 of my blog series). In fact, Native ads are now universally seen as the solution to the age old intrusive nature of advertisements.