Native Mobile Ads to Drive $53 Billion in Revenues

Native mobile ads are already significant in the advertising marketplace. But they’re only going to continue to pick up speed. According to the results of two different studies, mobile native advertising is on a powerful upwards trajectory that shows no sign of slowing down. 

Facebook Releases Native Advertising Stats

Facebook recently released its latest advertising statistics on its Facebook Audience Network (FAN), showing that a full 83 percent of advertisements on Facebook are now native advertisements.

In a separate study performed by Facebook and IHS Technology, it was determined that mobile advertising will account for 75.9 percent of all advertising purchases in the global digital market between 2016 and 2020. 63 percent of those mobile advertisements will be native advertisements. This surge in mobile native advertising will push spending and result in an expected $53 billion in ad revenue.

Native Advertising Effectiveness

The native advertising stats released by Facebook included more than just numbers and predictions. The research also looked into native advertising effectiveness and why these ads are so successful. According to the joint study between Facebook and IHS, native advertising is more effective than traditional models.

When compared to banner advertisements, native ads have 20 to 60 percent higher engagement rates. The native ads also beat banner ads in retention – 3 times over. On Facebook, those same native ads beat out banner ads in CPMs as well. Native ads have CPMs 7 times higher.

This is partially due to the positioning of native advertisements versus the more traditional banner ads. Consumers have conditioned themselves to ignore banner ads on mobile apps and to not look at the very top or the very bottom of the screen where these ads appear. Native mobile ads, however, are often presented seamlessly in-feed, making consumers much more likely to see and interact with the marketing.

In fact, Facebook – one of the giants in social media – recently dropped banner ads altogether from the demand-side of its Atlas platform for buying and measuring ads. Apparently, at Facebook, internal research results show that only native and video ads create value for advertisers on the platform.

Mobile Native Advertising in Asia-Pacific Region

The IHS and Facebook report mentioned the Asia-Pacific region as an area with particular growth potential in terms of native advertising. This market is expected to have the largest regional increase in native advertising spending. In the next five years, the compound annual growth rate is expected to come in at 177 percent.

Native mobile ads in the Asia-Pacific region are expected to reach $14.1 billion by 2020. Additionally, advertising inside third party apps, third-party in-app native advertising, is expected to earn $3.6 billion.

The Future of Native Ads

Facebook is in an excellent position to gain significantly from the trend toward more native advertising. It’s already beating Google in mobile displays ads by more than 20 percent, according to eMarketer. But there are lessons for the industry as a whole in Facebook’s experiences and the released research results.

Eleni Marouli, principal analyst at IHS Technology and co-author of the research study, stated: “Initially, we saw mobile advertising struggling to match the success of mobile app usage and consumer spending.” His statement continued, “Now, native advertising is booming and today’s most successful mobile marketers have already made the switch. The future of mobile advertising is native.”

What do you think about this news? Do you think it’s an accurate prediction of the future, or do you have a different idea? Tell us about it in the comments!

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