Blog posts (65 per cent), articles (63 per cent) and Facebook (56 per cent) are the most popular forms of native advertising, a report from Hexagram and Spada has found.
The research, which surveyed over 1,000 professionals working in publishing, advertising and PR agencies, discovered that 62 per cent of publishers surveyed are already offering native advertising, whereas only 34 per cent of agencies are offering it as a service.
Currently, native advertising represents an average of 20 per cent of total current publisher revenues and publishers expect it to represent 30 per cent of their total revenues within a year.
The vast majority of publishers (84 per cent), agencies (81 per cent) and brands (78 per cent) believe that native advertising adds value for customers, with sponsored content viewed positively by 56 per cent of brands and 50 per cent of agencies.
The most popular way of signposting ad content was through the use of the tags ‘sponsored’ (64 per cent), followed by ‘brought to you by’ (34 per cent) or ‘featured’ (29 per cent).
“As with any new market, there are entities that are quick to realise potential, and those that get left behind,” Chris Ingham Brooke, founder and CEO of Hexagram, commented on the survey findings. “Importantly, it can take time for new formats and media to catch on - this happened with display advertising and it is happening now with mobile. Faced with commoditisation from display advertising, combined with an ability to create content, it’s no surprise that publishers are leading the way.
“The survey clearly highlights some major concerns for agencies. Brands feel comfortable generating content and managing native ads internally, and indeed expect this to be a bigger part of day-to-day operations than agencies do. Agencies need to envisage how they can add maximum value for their clients’ campaigns, and in turn establish their most viable business model as this multi-billion dollar marketplace becomes fully liquid.
“However, it is imperative that brands and agencies also recognise that it will not serve their interests to invest in advertising that deceives consumers under the guise of impartial editorial. Brands, agencies, publishers, regulators and the ad tech community must work together, and in consultation with consumers, to establish best practice around when and how it is appropriate to label sponsored content and other forms of native advertising.
“The State of Native Advertising 2014 survey has been released in co-ordination with the launch of Hexagram, a technology platform that empowers publishers, brands and agencies to build, manage, and optimise their businesses around native advertising.”
Budgetary resources are the biggest obstacles to increased use of native advertising (cited by 44 per cent of respondents), closely followed by a lack of information about traffic sources and other metrics (30 per cent).
The research surveyed 385 respondents in publishing, 339 respondents from brands and 305 that worked in advertising.