industry index native advertising insight report - april 2015
TRANSCRIPT
INSIGHT REPORT
NATIVE ADVERTISING!
APRIL 2015!
+ Executive summary
+ Methodology
+ Survey findings
+ Sector analysis
+ Vendor rankings
+ Vendor profiles
+ About Industry Index Insight Reports
Table of contents
+ Marketers are overwhelmingly optimistic about the future of native advertising and what it promises from a brand engagement and performance perspective. That enthusiasm is reflected in healthy spending. Those currently leveraging native as part of their media strategy are allocating an average of 26% of their media budgets to it, and they anticipate spending more in the next 12 months.
+ Native advertising may lack an industry-standard definition, but the marketers who participated in this study were clear on what it is designed to do: blend seamlessly into the content around it.
+ Marketers indicated that their primary campaign goals were boosting upper-funnel brand metrics, although increasing conversions ranked third among stated objectives, cited by 73% of respondents.
+ Native ad vendors need to deliver strongly against the six core Industry Index ratings criteria—innovation, value, service, collaboration, scalability and performance/ROI, with performance the most important selection factor—in order to win consideration and continued business from buyers.
Executive summary
+ This report consists of two parts. Between March 25 and April 23, 2015, verified marketers were first asked to rate a selection of eight vendors according to the six standard Industry Index ratings criteria. The rankings in this report reflect the position of these vendors on the Industry Index leaderboard as of April 23, 2015, the day the study concluded.
+ After rating vendors, marketers were asked to complete a brief survey to indicate: – Their current and future spending plans about native
advertising – The importance of six criteria as they relate to choosing
a partner for native ad campaigns – The importance of and their satisfaction with 12
capabilities and objectives associated with native advertising
+ Industry Index is vendor-agnostic. We do not make recommendations. Likewise, every company has an equal opportunity to compete for industry recognition on our platform. The vendor rankings in this report solely reflect the opinions of marketers who are either current or former clients of the profiled companies or who have evaluated the companies.
Methodology
SURVEY FINDINGS
+ One of the industry challenges around native advertising is it lacks a standard, easily identifiable definition. But when we asked respondents how they define it, a clear theme emerged. In the words of one respondent, native is “advertising that follows the form and function of the content in which it appears.”
+ Another noted: “It is advertising that doesn’t really feel like advertising; it feels like it is a part of the platform and provides informational or entertainment value to the end user.”
+ Marketers, then, are clear on what native advertising is and how it is designed to function. And whereas the benefits of ads that blend seamlessly into the content around them are evident to those placing the ads, respondents also acknowledged the continued need to distinguish between actual editorial and ads: – “Advertising still needs to be labeled ‘sponsored.’”
– “Sometimes [a native ad] is used to deceive the consumer into thinking it’s an actual article or original piece of editorial content, but that should not be the goal.”
+ Q: How do you define native advertising? / N=83
Emerging consensus around the question of “what is native advertising?”
More than two-thirds of respondents (69%) indicated they currently leverage native advertising as part of their media strategy.
Of those not currently leveraging native advertising—nearly one-quarter of the total—57% said they plan to incorporate it into their media strategy within the next six months and 90% said they plan to do so in the next year.
+ Q: Do you currently leverage native advertising as part of your media strategy? / N=84
Marketers are leveraging native advertising
Currently!
69% 25%
Plan to!
6%
No and do not plan to!
Average anticipated increase in native ad spending over the next 12 months!
Among marketers currently leveraging native advertising as part of their media strategy, the average share of current media budgets allocated to native is 26%.
On average, marketers already spending on native advertising anticipate increasing their spend on native ads by 26% over the next 12 months.
Those not currently spending on native advertising but planning to do so in the next 12 months said they anticipate allocating 17% of their media budgets to native.
+ Q: What percentage of your current media budgets are allocated to native advertising? / N=58
+ Q: Please estimate how you anticipate your investment in native advertising will change over the next 12 months. / N=58
Marketers’ spend on native advertising is healthy
26% Average share of current media budgets allocated to native advertising!
26%
Reflecting the current emphasis in media buying, mobile and display were the channels where use of native advertising was most prevalent.
Marketer usage of native technologies lagged for social and video, at 62% and 53%, respectively. However, with video the fastest-growing channel on both desktop and mobile, expect native video placements to catch up quickly with established display media.
+ Q: Across which of the following channels do you employ native advertising? / N=58
Mobile and display are the leading channels for native; video is the laggard (for now)
84%
Mobile!
78%
Display!
62%
Social!
53%
Video!Channels across which respondents employ native advertising!
85%
Service!
After sharing their current and future spending outlook, respondents ranked the importance of six criteria when selecting a partner to run native advertising campaigns.
The six criteria—Innovation, Value, Service, Collaboration Scalability and Performance/ROI—are the same ones marketers use to evaluate and rate companies on the Industry Index on a 1-10 scale.
Survey results suggest that native advertising partners need to deliver strongly against all six criteria—with performance the standout—to win consideration and continued business from buyers. + Q: How important are the following criteria when selecting a partner
to run native ad campaigns? / N=79
Native advertising partners need to deliver against the core Industry Index evaluation criteria
94%
Performance!
89%
Collaboration!
91%
Innovation!
91%
Value!
91%
Scalability!
Percent of respondents saying criteria are very important or important!
76%
Video content!
7%
17%
92%
Audiences!
4%
4%
Trailing in importance were video content (not surprising in light of respondents’ relatively low utilization of native video advertising), sharing mechanisms (more surprising given the importance of virality for native ads) and programmatic (which likely reflects the current limitations in native programmatic inventory). + Q: How important are each of the below capabilities to you when
leveraging native ad units? / N=76
Audiences, measurement, placement and creative were the most important capabilities
Consider important/ Very important
89%
Placement!
87%
Creative!
91%
Measurement!
Consider unimportant/very unimportant
4%
4%
5%
Marketers cited audiences, measurement, placement and creative as the most important capabilities when leveraging native ad units.
Consider neither important nor unimportant
7%
9%
4%
76%
Social/Sharing mechanisms!
11%
19%
60%
Programmatic!
14%
26 %
70%
Video content!
4%
26%
81%
Placement!
4%
11%
Marketers cited other native advertising capabilities with which they were particularly satisfied, including better performance (higher click rates than standard display ads) and having a “stronger forum for delivering brand messaging.” + Q: How satisfied are you with each of the below capabilities of your
current partners when leveraging native ad units?/ N=54
Marketers were most satisfied with native placement, creative and audience capabilities
Satisfied/Very satisfied
74%
Audience!
72%
75%
Creative!
Dissatisfied/Very dissatisfied
6%
2%
4%
A majority of marketers were satisfied or very satisfied with their current providers on nearly all the tested capabilities, with programmatic the lone exception.
Neither satisfied nor dissatisfied
21%
26%
21%
65%
Measurement!
13%
22%
49%
Programmatic!
13%
38 %
Social/Sharing mechanisms!
91%
Measurement!
Native ad vendors are performing well when it comes to placement and sharing mechanisms, but they should pay close to attention to those areas where marketers perceived a sizable gap in performance. + Q: How important are each of the below capabilities to you
when leveraging native ad units? / N=76 + Q: How satisfied are you with each of the below capabilities of your
current partners when leveraging native ad units?/ N=54
Measurement and audiences are the areas with the greatest room for improvement
Consider important/ Very important 92%
Audiences!
86%
Creative!
Satisfied/Very satisfied 66% 74% 75%
The gap in perceived importance and marketer satisfaction with their current partners was widest around measurement, audiences and creative.
25 pts
Gap in delivery from current partners
19 pts
11 pts
66%
Driving social sharing!
11%
23%
88%
Increasing brand engagement!
4%
8%
One marketer commented: “It's mostly about content engagement.” Another cited “brand favorability” as a goal. Still, increasing conversions ranked third among stated objectives, cited by 73% of respondents. Several pointed to purchase conversions and driving in-store and online traffic as goals of their native ad campaigns. + Q: How important are each of the below objectives to you when
leveraging native ad units? / N=75
Driving brand lift and engagement are the primary goals of native ad campaigns
Consider important/ Very important
73%
Increasing conversion!
69%
Increasing share of voice!
86%
Driving !brand lift!
Consider unimportant/Very unimportant
7% 7% 5%
Marketers leveraging native ad units indicated their campaigns are focused on boosting upper-funnel brand metrics.
Consider neither important nor unimportant
20% 24% 8%
When choosing partners for native ad campaigns, marketers tend to opt for more than one, reflecting the range of criteria and capabilities important to them.
On average, respondents said they work with four native advertising partners, but there was a segment (approximately 12% of those surveyed) who said they worked with eight or more native ad partners.
The bottom line for vendors in this burgeoning space: Expect to be just one of a handful of partners marketers are testing for native implementations and be prepared to deliver against their capability expectations.
+ Q: How many native advertising partners do you currently work with? / N=58
Marketers are working with multiple native ad vendors
Average number of native ad partners marketers currently work with!
4
Reflecting the strong expectation-to-satisfaction ratio identified in this study, marketers in general have a positive outlook about native as a marketing option.
In total, 82% of respondents said they were optimistic or very optimistic about the future of native ad technologies.
The concerns expressed—and they were few—revolved around the longevity of native’s appeal and whether the growing prevalence of native ads across content sites would eventually provoke an audience backlash.
+ Q: How optimistic are you about the future of native ad technologies? / N=81
Overall marketer sentiment about native is upbeat
Very optimistic!
9% 73%
Optimistic!
13%
Neither optimistic nor pessimistic! Pessimistic!
2%
+ Respondents were enthusiastic about the promise of native advertising, particularly around a few core opportunities: – More effective, more integrated and better
performing brand messaging – Advertising experiences that provide more value
for consumers – Custom and unique creative offering new ways to
reach and engage audiences – Ability to serve highly relevant, engaging content
to targeted audiences
+ Looking toward the future, respondents anticipated improvements to native advertising’s scalability (“content development and distribution at scale”), greater emphasis on cross-platform, cross-device experiences, particularly around mobile and “likely integration with programmatic capabilities down the road.”
+ Q: What do you consider the biggest opportunity within native advertising? / N=61
Marketers see numerous opportunities for more effective messaging with native ads
+ A total of 84 experienced marketers completed an online survey on native advertising between March 25 and April 23, 2015. The majority of those who completed the survey (93%) were given $10 incentives. All respondents were verified through the Industry Index platform.
+ The bulk of respondents (93%) indicated they work for agencies; the remaining 7% indicated they work brand- or client-side.
+ Respondents comprised a mixture of executives (VP-level and above), strategists, media buyers and planners and marketing leaders, with approximately 40% indicating titles that were director-level or above. The majority of respondents were highly experienced, with 52% indicating 6+ years of experience.
Respondent profile
SECTOR ANALYSIS
+ Native is an emerging format for marketers interested in display advertising. In the near term, blurring the line between what is perceived as content and what is perceived as an ad may result in higher click rates and user engagement, but as with any emerging format, marketers need to take into account the “growing pains,” notably the following issues: – Scale – Transparency – Viewability – Cost – Limited (for now) programmatic inventory
+ Also keep in mind: Display is one the most heavily researched of the eight top-level channels on the Industry Index, and within the display channel, native advertising is a leading subcategory. That indicates a high degree of overall interest in the topic.
+ Five of the the eight vendors selected for this study ranked among the top 2% of companies profiled on the Industry Index—another gauge of marketer interest in and satisfaction with vendors in this space.
Sector analysis
VENDOR RANKINGS
+ Industry Index asked verified marketers on our platform to rate the following vendors as part of their participation in this study: – AdsNative – DistroScale – Kargo – Nativo, Inc. – Polar – Sharethrough – StackAdapt – TripleLift
+ We also invited the vendors to request reviews from current and former clients.
+ Marketers evaluated the above vendors according to the standard Industry Index ratings criteria. Rankings are determined solely by marketer input.
Vendor rankings
Vendor!
Position on Industry Index leaderboard*!
Overall score !(out of 100)!
Number of ratings!
TripleLift 9 76 32
Nativo, Inc. 13 73 38
Kargo 30 68 41
Sharethrough 35 67 49
AdsNative 38 66 10
Polar 114 66 5
StackAdapt 205 56 3
DistroScale 210 84 2
Vendor rankings at end of study
+ The following rankings reflect the positions of the eight vendors on the Industry Index leaderboard as of April 23, 2015, the day the study concluded:
*Industry Index leaderboard rankings are determined by both the quantity and quality of ratings submitted by verified marketers. The rankings fluctuate on a continuous basis as new ratings are submitted.!
Vendor!Position on
March 23, 2015!Position on April 8, 2015!
Position on April 23, 2015!
AdsNative 303 140 38
DistroScale 918 922 210 Kargo 57 29 30 Nativo, Inc. 3 13 13
Polar 1499 235 114
Sharethrough 42 24 35
StackAdapt 1724 350 205
TripleLift 8 9 9
Vendor rankings over time: start, middle and end of study
+ The positions of the eight vendors on the Industry Index leaderboard fluctuated—in some cases, significantly—over the course of the study, reflecting the influx of new marketer ratings. One outcome: increased visibility.
*Industry Index leaderboard rankings are determined by both the quantity and quality of ratings submitted by verified marketers. The rankings fluctuate on a continuous basis as new ratings are submitted.!
VENDOR PROFILES
AdsNative is an ad platform that allows publishers to monetize their websites and applications through visually integrated ads that blend with their content.
Clients say:
+ “Best tech company I work with. Awesome team that always jumps in to help when needed. Really make my native advertising life easy.”
+ “Currently buy native media. Platform and team are great. They don't have enough inventory at this point to effectively scale my campaigns but see that changing.”
+ “Great knowledge, easy to work with.”
AdsNative profile
Position on Industry Index leaderboard!
38 66
Overall score!
10
Number of ratings!
DistroScale is a platform and marketplace for buying, delivering, managing and measuring native content across websites, mobile web and apps.
Clients say:
+ “Great for someone reliant on or using content marketing heavily; marketplace is an option I have not used, but might consider in the future. Happy with service and extra functions added, would continue to use as one of main platforms to distribute paid content amplification and earned media.”
+ “Very solid company. Worked with them on a B2B client and they got the job done.”
DistroScale profile
Position on Industry Index leaderboard!
210 84
Overall score!
2
Number of ratings!
Kargo weaves custom content and technology into its portfolio of premium publishers’ mobile/tablet properties, offering advertisers integrated brand experiences.
Clients say:
+ “Agile, quick to develop customized solutions to meet current advertiser/marketplace needs. The cost of doing so however could be improved.”
+ “Innovative ad products, better than any site direct publisher out there.”
+ “What makes Kargo stand out is their partnership with MOAT. This gives advertisers more data and insights to work with, which is a major interest especially considering that they can measure viewability.”
Kargo profile
Position on Industry Index leaderboard!
30 68
Overall score!
41
Number of ratings!
Nativo is uniquely focused on true native executions: contextually aligned, always in the editorial feed, with the brand content consumed within each publication.
Clients say:
+ “My team has had great experiences working with Nativo and love their robust offerings.”
+ “We have enjoyed working with Nativo because they make the process so easy. They have been incredibly helpful in writing creative assets for the client.”
+ “The flat fee is quite expensive but depending on the client/campaign goals, it's certainly a strong native offering, especially with the custom landing page opportunities to help further educate consumers on the brand/products being advertised.”
Nativo, Inc. profile
Position on Industry Index leaderboard!
13 73
Overall score!
38
Number of ratings!
Polar works with the world’s largest publications to power, monetize and scale their native advertising business across desktop and mobile using its MediaVoice platform.
Marketers who have evaluated Polar say:
+ “Strong presence and offering, combining mobile with native for scale. Strong team with innovation, cash and vision.”
+ “They seem to be everywhere in media news right now … getting a lot of buzz. They sound like they know what they are talking about, making themselves a leader in the native space.”
+ “They have a great creative offering and very strong customer service team.”
Polar profile
Position on Industry Index leaderboard!
114 66
Overall score!
5
Number of ratings!
Sharethrough is a native advertising company that enables top brands to distribute content through integrated and choice-based advertising across major publishers.
Clients say:
+ “Great performance, adapting to user needs, simple process and campaign management, not overly complicated and scalable.”
+ “They were able to more efficiently distribute content than any other partner we considered.”
+ “Sharethrough has been a pleasure to work with. Their service is amazing, and they try and make our lives easier, not more difficult (can't say that about all publishers).”
Sharethrough profile
Position on Industry Index leaderboard!
35 67
Overall score!
49
Number of ratings!
StackAdapt is a native advertising demand-side platform that powers trading desks and content marketers with programmatic native advertising capabilities.
Clients say:
+ “Not up to par with competitors. Service offering and positioning unclear and vague familiarity with the realities of the industry. Somewhat scalable, yet diluted with lower-end publisher and ad network access.”
+ “StackAdapt had a solid product, however, in my opinion, lacked the vision to push this product to leading edge. It seems a sufficient solution. However, for advertisers looking to push the bounds, it may be best to keep looking.”
StackAdapt profile
Position on Industry Index leaderboard!
205 56
Overall score!
3
Number of ratings!
Leveraging pioneering computer vision technology, TripleLift transforms visual content into native ads that match the unique look and feel of a publisher’s website.
Clients say:
+ “Always a pleasant experience working with TripleLift. I work with a direct response agency, so I have very hard KPIs to reach. They are very knowledgeable and able to work with all our systems. They integrate very well.”
+ “Good dynamic creative product and improving with the flexibility of display templates. The native units are a strong competitor in the native market due to the programmatic nature and lower cost. May struggle as more programmatic platforms improve creative capabilities.”
TripleLift profile
Position on Industry Index leaderboard!
9 76
Overall score!
32
Number of ratings!
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