Dive Brief:
- Based on data from the Interactive Advertising Bureau (IAB), PwC and IHS, BI Intelligence predicts that native advertising will account for 74% of all ad revenue by 2021. It’s currently at 56%.
- The BI Intelligence report attributes the coming rise of native ads to the increasing importance of Facebook and Twitter as advertising channels.
- Another reason cited is the introduction of programmatic technologies that make it easier for publishers and advertisers alike to buy and sell native ad inventory at scale.
Dive Insight:
Social media channels have been early adopters of native ad units, and that has really driven the category's current and future growth. Moreover, Facebook has even said native and video ads offer more value than other tactics like banner ads, and even detailed a plan to reduce waste on the social network.
The BI Intelligence report breaks out native ads into three categories: social native, native-style display, and sponsored content (also referred to as premium native). According to BI Intelligence, native ads will make up the majority of ad revenue for social media platforms as well.
Breaking down the numbers, BI Intelligence expects native display will account for most of native ad revenue through 2021, growing at a five-year compound annual rate of 17%, eventually passing $36 billion. Native video ads, especially those served on social media platforms, will be the main driver of this growth rate.
Even though native display will get the most ad revenue, sponsored content will be the fastest growing native format. However, BI Intelligence pointed out that the format’s high production cost and inventory limitations will keep sponsored content as a more specialty native ad format.
