Study: Native advertising will be the dominant digital advertising form by 2020
Native advertising is expected to account for more than half of all digital advertising in 2020. This is the conclusion reached by the study «Native Advertising in Europe to 2020» by Yahoo and Enders Analysis.
The study will be presented for the first time at this year's Mobile World Congress. According to the study, native ads will increase by 156 percent over the next five years and account for 52 percent of digital advertising across Europe by 2020. According to the study, native advertising will account for three quarters of the growth in online ads over the next five years.
The study attributes the explosive growth of native advertising to changes in user behavior, particularly the increased use of smartphones and tablets, which will dominate content search and consumption in the future. As a result, most of the growth in spending on native advertising will come from serving content to mobile devices. In 2020, EUR 8.8 billion is expected to be spent on this across Europe - almost six times the EUR 1.5 billion that advertisers invested in this last year.
The most important forecasts from "Native Advertising in Europe to 2020" at a glance:
- Spending on native advertising in Europe will grow 2.6 times over the next five years, from €5.2 billion in 2015 to €13.2 billion in 2020. This means it will account for 52 percent of total online advertising spend in 2020.
- Spending in the mobile sector will amount to EUR 8.8 billion in 2020, a significant increase compared with EUR 1.5 billion in 2015.
- Native advertising on social networks will grow from €2 billion in 2015 to €6.3 billion in 2020.
- In-stream advertising will grow from EUR 2.4 billion in 2015 to EUR 5.1 billion in 2020.
Country-specific forecasts (Germany, UK and France):
Germany: Native advertising is forecast to grow from EUR 545 million in 2015 to EUR 1.7 billion in 2020.
UK: Native advertising is forecast to grow from £1.2 billion (€1.7 billion) in 2015 to £2.8 billion (€3.9 billion) in 2020.
France: Native advertising is forecast to grow from €343 million in 2015 to €824 million in 2020.
Access to content via social networks as an important growth factor
Increasing access to content via social media is another key growth factor. This will cause spending on native social network advertising to increase by more than 300 percent by 2020, from two billion euros at present to 6.3 billion euros in 2020. Furthermore, rising video consumption will cause investment in in-stream advertising to more than double from 2.4 billion euros in 2015 to 5.1 billion euros in 2020.
Based on an analysis of the digital advertising market in 19 European countries, the report evaluates various native advertising formats and platforms such as mobile, social, video, ads tailored to PC screens, and widgets. It highlights the benefits of native advertising for media companies that see the development of novel formats as a unique selling point for their advertising offering. Advertisers and agencies should find native advertising more powerful and efficient.
Native advertising hardly recognizable for ad blockers
The study also shows that Native Advertising can be used to mitigate the effects of ad blockers, as this form of advertising is difficult for blockers to detect. At the same time, the study points out that native ads are not completely immune to ad blockers. However, the still young format offers advertisers an attractive opportunity to set new standards. At the heart of this are the specific interests of users: Those who take them into account give media users less reason to block ads.
"Mobile users are driving rapid change in media consumption. This is a huge opportunity for advertisers," says Nick Hugh, VP EMEA, Yahoo. "Native advertising is a format that works extremely well on small displays and can provide a user experience that is appropriate and engaging for the context. It's both a scalable solution for publishers to monetize and a creative and effective opportunity for advertisers - so it's an optimal solution for all parties."
"Native advertising is one of the rare win-win opportunities in the industry," adds Joseph Evans, digital media analyst at Enders Analysis. "The fledgling advertising form promises advertisers increased effectiveness, is valuable to publishers, and is more likely to be accepted by users than traditional banners."
Yahoo's native advertising platform, Yahoo Gemini, is a unified marketplace for native advertising across devices. Yahoo Gemini helps advertisers reach and engage the audience they want, delivering measurable results.
Method
"Native Advertising in Europe to 2020" was compiled based on industry data and interviews with media and agency executives. The study examines native advertising in key European markets and in Europe as a whole. Data on Internet access, device penetration and Internet usage were also taken into account.
Native advertising on the Internet is defined as advertising that is seamlessly embedded in its respective appearance environment. It is therefore advertising that fits in with the content surrounding it, rather than simply being to the left or right of it or appearing as a pop-up. The forecasts relate primarily to the most important devices for Internet use, i.e., desktop and laptop PCs, smartphones, and tablets.
