Dive Brief:
- Research from BIA/Kelsey found that native social advertising’s share of location-targeted mobile ad spending is projected to increase from the current 20% to 28% by 2020, according to Mobile Marketer.
- The BIA/Kelsey report predicts that location-targeted mobile ad spend in the U.S. will reach $29.5 billion in 2020, up from $9.8 billion in 2015.
- The BIA/Kelsey U.S. Local Advertising Forecast 2016 also saw search and display advertising losing market share: Search remains the largest share of advertising spending, but the report predicts that share will decrease from 57% down to 42% by 2020.
Dive Insight:
Native advertising and sponsored content are becoming more attractive to marketers in part because the formats are way to circumvent the growing use of ad blocking technology by consumers.
“Native social advertising is the big headline of this forecast,” Michael Boland, chief analyst and vice president of content at BIA/Kelsey, told Mobile Marketer. “Based on Facebook's success with news feed ads and FAN, we've dialed up native social's share of the mobile ad revenue pie. We also see Instagram and Snapchat making big moves to make their native social formats more attractive and impactful for marketers.”
The report showcases the trend away from banner ads and toward more valuable forms of advertising, such native ads and content marketing. On Facebook, banner ads fell out of favor after the platform found them to be worth little compared to the value of native and video ads.
"[A]d blockers are accelerating the marketplace's inevitable shift from lazy banner ads to more blocker-immune material like content marketing," Boland said. "And of course there is the millennial factor, which is likewise establishing native social ads as the format for marketers to aim for.”
Snapchat, a platform that is used primarily by younger demographics, has recently made big moves to bolster its credibility with advertisers and marketers, announcing its 10th ad measurement partner in the last 12 months and launching an automated application programming interface (API) for its ad partners. Armed with skyrocketing user growth and impressive engagement metrics, the platform has been prioritizing native above other forms of advertising. The app has no banner ads, for example, and that kind of restrictive approach to advertising has helped it maintain the trust of its users.