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Native to take half of digital display

News, 24 February 2016

LONDON: Native advertising will account for over half of digital display advertising across Europe within five years according to new data.

Figures from Yahoo and Enders Analysis, reported by Mediatel, suggested that spending on native advertising would reach €13.2 billion by 2020 – a 156% increase on today – and take a 52% share of the digital display market.

Within the UK, native adverting expenditure was predicted to grow 129% over the same period, from €1.7bn to €3.9bn

The great majority of the European total – some 85% – will be directed to mobile, while social and video will also be important factors in the format's growth.

For example, content discovery is increasingly being made via social media platforms and this will help drive more than threefold growth in native social network advertising, from €2bn to €6.3bn between 2015 and 2020.

At the same time, investment in in-stream video ad formats will more than double, from €2.4bn to €5.1bn.

"Native advertising looks like a rare win-win for the industry: more effective for advertisers, more valuable for publishers and more acceptable for users," said Joseph Evans, a digital media analyst at Enders Analysis.

"Its suitability for mobile, social and video contexts means that growth in native will contribute the large bulk of increased digital display spend."

While not disputing the overall trends, Warc's own analyst thought the figures optimistic. "For the European display market to be worth €25.4bn in 2020, as suggested by Yahoo, it will need to near double from 2015 levels," James McDonald pointed out.

"This is not completely unreasonable to assume given social and video spend should continue to balloon during this time," he said.

However, McDonald deemed native adspend of €1.7bn in the UK last year as "unlikely", putting the figure closer to €900m.

He added that future regulation could also affect the figures. "Guidelines for advertorial content are being flouted to a degree at present," he said. "Were they enforced, consumer cynicism for the format may knock investment."

Data sourced from MediaTel; additional content by Warc staff