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Native advertising nears limits

News, 09 October 2015

NEW YORK: Advertising executives remain positive about native advertising according to a new study which also suggests the format may be nearing its limits in terms of share of ad spending.

Advertiser Perceptions Inc (API) surveyed 312 ad executives earlier this year and recorded a net optimism figure of 51 (being the difference between the percentage planning to increase spending on the format over the coming 12 months and that intending to decrease it).

That was down five points from a similar 2014 survey, MediaPost reported. It added that while native advertising's share of total digital spending by these executives had risen from 18% to 22% over the same period, it could be "reaching a point of saturation".

Social media platforms are a favoured channel, with 70% of those respondents using the format buying space there, and that proportion is expected to edge upwards to 73% next year.

Programmatic is also playing an ever greater role in placing those ads. Just over one quarter (26%) currently buy native advertising this way, a proportion set to rise to 34% in 2016.

The survey revealed some distinct differences in attitudes between clients and agencies. Half of agency executives, for example, reported that they were already buying native ads programmatically, but just one third (34%) of clients were doing so.

Agency executives were also rather more bullish on the future prospects for the format, with 57% anticipating they would increase spending in the coming 12 months, compared to 49% of clients.

Jimmy Maymann, chief executive of the Huffington Post, has described native as "the new black", but, speaking at a conference earlier this year, he too saw an upper limit on native advertising.

One-fifth of the content on the Huffington Post site is now native advertising, a figure that's rising, but can only go so high before it becomes counter-productive.


"It will never be 50-50 because that would be a terrible user experience, and users would obviously go somewhere else," Maymann said.

Data sourced from MediaPost; additional content by Warc staff