87.7% of US Native Advertising will be Purchased Programmatically by 2020

Native Advertising
Programmatic-Code

A report, recently published by eMarketer, presents its predictions by juxtaposing 2018 numbers with 2020 estimates. It concludes that in 2020 native advertising will be more programmatic and mobile, but less social. That said, social native advertising still commands around 75% of native spending. However, that number is expected to go down by 2020.

This bodes well for native advertising tech companies moving forward – especially content demand side platforms (DSPs). The industry’s outlook is rosy, indeed. As social’s share of voice declines programmatically, it’s the non-social technology platforms that will benefit the most. However, the report goes on to warn that fragmentation in this market can be a problem for buyers with so many vendors globally. It’s the DSPs that solve for this fragmentation by consolidating the supply vendors under one platform and have the greatest growth outlook moving into 2020.

Native Ads Will Be More Programmatic

In addition, it cites MediaRadar’s H2 2018 numbers that new advertisers using native have stagnated. This is used to claim that the native market is mature. The MediaRadar report also found that in H1 2018, 473 advertisers placed native ads for the first time each month, on average. However, it also shows that only 11% of online advertisers are placing native ad units.

Is Programmatic Native Advertising Mature Yet?

The eMarketer analyst goes on to say, “Native advertising outside social platforms still faces many of the same challenges as it did in 2018, including advertiser clients not educated about native formats and native creative.”

Based on these two reports it’s hard to confidently say that native advertising is mature when just over 1/10th of online advertisers are doing it. Lack of education and technology fragmentation certainly play a role in this. However, marketers in the field tell me that paid media budgets are siloed away from content marketing by old, more traditional, corporate structures.

The average television executive spends five dollars on distribution for every one dollar they spend on creative. Based on my own research, the average content marketer does the opposite. This is also to blame for why only 11% of brands doing online paid media are doing programmatic native distribution.

However, this doesn’t change the fact that programmatic native advertising on both social and other networks is the most effective scaled paid distribution and amplification channel for top and middle funnel content.

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According to the Content Marketing Institute, content marketing adoption rates for B2B brands is 91% and 86% for B2C brands, respectively. This means that there’s a whole lot of brands creating content and NOT doing any form of paid content amplification.

As marketers, we live in a world of content surpluses and standing out in the crowd organically is difficult for most. It’s this fact that birthed programmatic native advertising in the first place. As a result, there’s huge room for growth and programmatic is far from mature.

Below is a list of reasons brands do content marketing in the first place. It’s hard not to do it after exploring these numbers.

  • 84 percent of people expect brands to provide content that entertains, tells stories, provides solutions, and creates experiences and events. (Meaningful Brands, 2017)
  • 70 percent of internet users want to learn about products through content versus traditional advertisements. (MDG Advertising)
  • 84 percent of millennials don’t trust traditional ads. As for Gen Z, purchasing decisions aren’t influenced by ads, but rather by other forms of content (McCarthy Group)
  • The average person consumes 11.4 pieces of content before making a purchasing decision (Forrester)

As a result, it’s safe to assume that content marketing isn’t going away any time soon. However, as more and more marketers struggle to gain the content visibility they seek, programmatic native advertising adoption will continue to grow. Full maturity is still likely years away.

The Opportunity is Now for Marketers

Eighty-nine percent of brands aren’t doing any form of programmatic native advertising. Now is the time for content marketers to start building this distribution tactic into their plans before the rush to the channel begins. Just like SEO adoption last decade – it was the early adopters then that reap most of the search engine benefits today.

It’s those earliest adopters that will benefit the greatest from programmatic native advertising technology because it’s not crowded with content yet like the organic channels most are relying on currently. eMarketer’s study predicts gracile growth in the channel overall heading into 2021. That growth could be much more robust if the industry fragmentation is solved (content DSPs solve this), education around programmatic native is prioritized (hence this article and many others), and content marketers budget five dollars on distribution for every one dollar they spend on creative.

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