Study: Native ads are soaring as programmatic suffers

Dive Brief:

The number of native ad buyers increased 74% over the past year, while programmatic buys in Q1 of this year were down 12% compared to the same period in 2016, according to new research from MediaRadar reported on by Adweek and MediaPost Communications.
While increases in programmatic spending once seemed likely, controversies regarding brand safety and ad fraud contributed to the Q1 decline, Todd Krizelman, MediaRadar's CEO and co-founder, told MediaPost, adding there have been gains in direct advertising buying and there is more investment in private marketplace programmatic as part of a "flight to quality."
Along with increases in the number of native advertisers, the number of mobile advertisers continues to grow, MediaRadar found; email advertisers saw a hike in numbers, while video advertisers had a very slight increase in Q1 of this year compared to the year-ago period.

Dive Insight:

As marketers strive to achieve greater authenticity and produce more narrative-focused content, native advertising is picking up serious traction. Native ads are also popular because the format outperforms traditional ad units, being looked at more frequently than non-native ads, and the clickthrough rate for mobile native ads is 4x higher than non-native mobile ads, Krizelman told MediaPost.

Given the spike in popularity of native, more major digital players are building out their offerings. Last week, Google rolled out AdSense Native ads that aim to improve the user experience with high-resolution images, along with longer titles and descriptions. Both the MediaRadar findings and the Google news underscore the importance of monetizing mobile content, with native providing opportunity in that area.

The new research also puts a fine point on advertisers' growing concerns around programmatic. Yahoo's BrightRoll arm surveyed 400 programmatic decision-makers in May and found 96% were concerned about fake news negatively impacting the space and brand safety; 31% of those surveyed said they would reduce programmatic spending over fake news.

In April, eMarketer updated its programmatic display forecast to predict 2017 spending of $32.56 billion, accounting for 78% of total display spending with that percentage increasing to 84% of total display spending by 2019. Reflecting MediaRadar's assessment, eMarketer did see a move toward more private marketplaces and direct buying over open exchanges.