Industry Insights Advertising

Why 2018 is shaping up as the year native advertising breaks out of the box


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March 27, 2018 | 6 min read

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In the five years since the IAB recognized native advertising as an official digital ad category, it has gone from shiny new format to a repeatable and tangible part of the advertising mix that is now easier than ever to buy.

Why 2018 is Shaping Up As The Year Native Advertising Breaks Out of The Box

Why 2018 is Shaping Up As The Year Native Advertising Breaks Out of The Box

When a buyer today sets up a campaign inside the Trade Desk, DBM or AppNexus a prompt asks them if their campaign is Video, Display, or Native. It’s one simple prompt, but it’s a huge deal: validating years of work and development to establish native as a viable, programmatically traded ad format - standardizing the format with the IAB, establishing open RTB specs, setting up direct DSP integrations and socializing the workflow so people know how to use it.

This small prompt inside DSPs is more than just ceremonial. It’s had massive business impact.

Where display spend is flat industry-wide, native advertising is projected to grow by 18% in 2018, which outstrips the projected growth in video spend (14%). In 2017, the amount of DSPs buying on the Sharethrough Exchange increased 6x. A year or so ago, just a few DSPs supported native demand. Now, support for native demand is universal. The Trade Desk - an early DSP mover in setting up native integrations - reported that native spending in Q2 2017 surpassed spend across all of 2016.

“There was once a time in display that you were like, okay, well, I have to have a 468x60. I have to have a 120x600. I have to have a 300x250. There was a time when those were standard. [Native] is the new ‘I have to include this on every campaign,’” the Trade Desk chief executive Jeff Green told Sharethrough chief executive Dan Greenberg during a sit down interview in 2016.

Native has never been as accessible as it is now and this increase in demand is breaking down common misconceptions of what it can be used for. Here’s four reasons why native’s growth is just beginning and 2018 is shaping up to be the year native advertising is truly breaking out of the box.

Buyers are realizing native advertising is a new version of a much older thing

More buyers are coming round to an obvious, but overlooked element of a native ad: it is simply the newest evolution of traditional display. At its essence, the building blocks of a native ad are the same as a banner ad - a brand logo, headline and creative. The native ad is slightly more complex, allowing brands to add in a short description and link out to a URL. Native ads take those same component parts but assemble them into a much different user experience, which blends into, rather than interrupting a publisher’s content feed. Now that native ads can be traded programmatically with such ease, traders can do all of the same targeting in their bid request as they can with traditional display campaigns.

The only good mobile ads are native ads

Mobile ad spend surged in 2016 and 2017 and it now represents over 50% of all digital advertising. According to Facebook Audience Network research, 63% of mobile ads will be native by 2020. This is driven by how terribly traditional display advertising has translated to mobile - the ads are confusing to manoeuver around and take over the small real estate of the phone. Native’s dominance within mobile advertising is only going to get more pronounced and mobile’s ascendancy within advertising is only going to accelerate.

As a platform, mobile is aggressively under monetized still: 28% of the time we spend with media is on our phones, but mobile only receives 21% of total ad spend, representing a $16 billion opportunity.

Native ads can adapt to, and outperform in, any marketing strategy

Native made its name originally as a brand lift tool: it attracts 9x higher CTRs than display ads, receives 8x the attention and when included in the media mix, brand lift and purchase intent rise markedly. Brands in 2018 are executing native for successful performance advertising campaigns, which has long been the traditional bread and butter of banner ads. For example, a major national educational institutional used Sharethrough to acquire leads - people who spent longer than 10 seconds on site or who visited multiple pages. They went in with a CPL target of $20 and managed to beat that by half. A major health and wellness company used native to drive people to a landing page where they could buy their product. They beat their target CPA by 44%.

Native has become a core part of any omnichannel campaign

Now that most DSPs are integrated with native advertising supply sources these days, it’s bought quality native supply into any trader’s preferred programmatic workflow. The world’s largest native advertisers all run native ad campaigns. Sharethrough works with 23 of the largest 25 advertisers in the world (according to Ad Age).

Put another way, it means that we can confidently say that at least 90% of the largest brands in the world run native campaigns. Underpinning this is the fact that native ROI transcends online reach - impacting everything from purchase intent and brand lift to offline foot traffic and sales lifts.

Frank Maguire, head of market development, Sharethrough

Industry Insights Advertising

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