The adoption of native advertising has continued to increase rapidly. Over the last 6 months we found a big increase in the number of brands placing native ads. More importantly, each month an average of 638 brands have placed native ads for the very first time! This is enormous growth.
This level of adoption is especially notable because, in a sea of emerging technologies, few gain traction. Only two years ago, native advertising was still being referred to as an “advertorial,” the name used for years in magazine and newspaper publishing to describe what some now call the predecessor of native advertising.
However, despite native advertising’s ascent, there is unequal penetration in the market place. At MediaRadar, we track native advertising, in its many implementations. Based on MediaRadar’s most recent Native Advertising Index, here are the key findings for the last six months:
1. Industry verticals with the greatest percentage of advertisers placing native ads. Food, alcoholic beverages and pet brands are the most likely to be placing ads. In these categories, an average of 20 percent are already placing native ads. This is significant adoption, especially for such a concentrated period of time. This is just over two times the penetration for the average of all other product categories (20 percent vsversus the average of 9 percent across all categories). The bottom three include Medical, Retail, Professional service and home furnishing brands.
2. Industry verticals with the most native advertisers. The top three industry verticals by the number of brands placing native advertising are technology, media and financial service firms. While none have the highest percentage adoption, these are giant product categories. Each has more than 250 individual brands placing native. The bottom three verticals include pharmaceutical companies, beverages and athletics.
It is no surprise to us that technology companies have been early adopters. After all, tech companies are familiar with short product life cycles and the urgent need to re-invent. For example, according to CNN Money, Samsung, one of the most active buyers of native advertising, introduced a new phone almost every week in 2014. Since native ads often resemble editorial, it makes sense that technology companies have embraced native advertising. The Internet is rich in technology content—video tutorials for software, walkthroughs of new video games, and of course reviews of products and gadgets. With so much technology, content marketers have fully embraced native ads as an effective advertising innovation.
Conversely, it’s not surprising that pharmaceutical and medical device brands have been slow to embrace native advertising. Marketing in these verticals are highly regulated by the FDA. Additionally, there may be greater perceived risk of public and legal response by blurring the line between editorial and marketing.
Apparel and athletics brands scored low on their current embrace of native advertising, with 7 percent and 8 percent, respectively, of the total brands in their category placing native ads. Although these industries generally target a younger demographic who would be responsive to this kind of marketing, these industries are not known for being early adopters. However, with consumers checking the stats for their favorite sports teams or look up tutorials on a hot new exercise craze, the opportunities for sports and fitness native ads are significant.
As the adoption of native advertising continues to amplify, we think the categories of advertisers buying native ads will surely fluctuate. Technology brands will most likely stay in the lead, but we expect some of the industry verticals who are currently moving slow and deliberately to shift their budget to include more native ads.
If you’re working with a brand product, what’s your current native advertising strategy? Will you be spending more on native ads in 2015?
This article originally ran on MediaPost.