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Native Advertising’s Giant Leap Into Mobile

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Posted by Jay Hinman on November 2, 2015
Native Advertising's Giant Leap Into Mobile

With all the hullabaloo around mobile ad blocking cresting in recent weeks, it’s been interesting to watch fingers pointing and flying in all directions. Consumers don’t understand how content stays free. Publishers need to wake up and stop loading so many tags. Advertisers are to blame for bad creative. It’s a desktop problem, not a mobile one — and so on. The ad blocking storm may even be a key driver in hastening the migration of publishers from their mobile websites to their own contained apps, which the iOS 9 Safari-based ad-blocking extensions generally can’t touch.

From our mobile-first perspective at Smaato, additional building blocks for a solution to dated advertising units were already well underway in the form of Native Advertising, a format uniquely suitable to mobile, and one that, if not wholly immune to ad blocking, is one that certainly circumvents it. A common definition for “Native Advertising” is any ad that matches the look and feel of the host site. At its most creative, it blends seamlessly into the user experience of the app or website, providing an ad that is nearly indistinguishable from the host site’s normal content, without unduly and unfairly masquerading as editorial content.

Native is one of the best tools mobile publishers have in their revenue-creation arsenal, and the eCPMs attached to it are far higher than those hauled in from traditional banners and interstitials, to say nothing of the fact that their click-through rates are 2-5 times higher than those from banners or display ads. Mobile native ads even garner nearly double the click-through rates of their desktop equivalents.

Many mobile publishers whom we work with at Smaato have either redesigned their apps to bring in native formats, or are in the process of defining how best to make this work. Media budgets will respond accordingly. Traditional 320×50 banner ads and even larger interstitials will increasingly be jettisoned for eye-pleasing and ad blocker-circumventing native ads. As new versions of thousands of apps are uploaded for approval into the app stores in coming months, we’ll very quickly see generations of app UIs that look and behave quite differently in 2016 than they do today — and from a consumer perspective, that’s almost certainly a good thing.

In-feed ads, perhaps the most popular and well-known of native ad units, work extremely well on mobile devices. It is a nearly standardized template that’s already recognizable to many on mobile platforms thanks to Facebook, Tumblr, Instagram, and others. As Lauren Fisher from eMarketer says in her recent report “Programmatic Native Advertising”, “They’re an ideal choice to stay engaged with an audience that is increasingly moving to these smaller screens”. The majority of native spend has been via these social media sites to date, but this, too, will evolve as we start seeing new native formats crop up in games, in music apps, and in utilities.

It’s not difficult to imagine a future not too far from our present in which the mobile native ad is much more akin to the barely-noticeable product placement we’re subconsciously familiar with from television. Is this a good thing? It’s certainly not a bad one for those who consume free mobile content monetized by advertising.

While eMarketer’s Fisher believes that “The industry (in 2015) is still in the first innings of retrofitting native ads into programmatic pipes”, the eventual upshot of this will ultimately be native ads targeted to a consumer’s unique demographic, psychographic, and technological profile — and which are so highly relevant that they won’t feel like ads at all.

Mobile advertising platforms have even responded to the rising tide by making it easy for mobile publishers and app developers to set up and create their own native ad units, which only positively exacerbates the much-needed shift to a better — and less contentious — mobile advertising ecosystem for all.

 

Posted on October 28 on VentureBeat

Written by Jay Hinman

Jay Hinman is Smaato's VP of Marketing. He leads Smaato's global marketing team across its key locations in San Francisco, Hamburg, Singapore and New York.

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