LONDON: Most agencies believe that native advertising adds value for their clients but few are actually offering it as a service and are ceding that territory to publishers and brand marketers, a new survey has claimed.
The State of Native Advertising 2014 report from Hexagram, the native advertising exchange, and Spada, the PR consultancy, was based on a survey of more than 1,000 respondents drawn from across the publishing, advertising, marketing and PR industries.
The State of Native Advertising 2014 report from Hexagram, the native advertising exchange, and Spada, the PR consultancy, was based on a survey of more than 1,000 respondents drawn from across the publishing, advertising, marketing and PR industries.
It found that while 84% of agencies thought native advertising was a valuable service for clients only 34% offered it themselves.
In contrast, 62% of publishers surveyed were already offering native advertising while 41% of brands were engaged in this activity with two thirds creating the content themselves.
The report suggested that agencies not offering a native advertising service were missing out on "significant opportunities to acquire powerful and high-quality inventory". But it also noted that this situation was being recognised and addressed as 20% of brands and 12% of agencies currently not engaging in native campaigns were planning to start using it within the year.
Publishers meanwhile were planning to push on further with another 16% planning to offer the facility in the coming year, a period during which the sector expected native advertising's share of their revenues to rise from 20% to 30%.
Chris Ingham Brooke, founder & CEO of Hexagram, noted that brands were comfortable generating content and managing native ads internally and said this presented a challenge to agencies.
"Agencies need to envisage how they can add maximum value for their clients' campaigns, and in turn establish their most viable business model as this multi-billion dollar marketplace becomes fully liquid," he said.
He added that it was also important that all parties involved – brands, agencies, regulators, the ad tech community – worked to establish best practice regarding the labelling of sponsored content and other forms of native advertising.
Some 79% of publishers were already clearly labelling native advertising campaigns to distinguish them from editorial content. As a result, the majority of publishers (82%) and brands (71%) surveyed had not received complaints as a result of native advertising campaigns, but that still left a minority of complaints that had the potential to damage the reputation of the technique.
In contrast, 62% of publishers surveyed were already offering native advertising while 41% of brands were engaged in this activity with two thirds creating the content themselves.
The report suggested that agencies not offering a native advertising service were missing out on "significant opportunities to acquire powerful and high-quality inventory". But it also noted that this situation was being recognised and addressed as 20% of brands and 12% of agencies currently not engaging in native campaigns were planning to start using it within the year.
Publishers meanwhile were planning to push on further with another 16% planning to offer the facility in the coming year, a period during which the sector expected native advertising's share of their revenues to rise from 20% to 30%.
Chris Ingham Brooke, founder & CEO of Hexagram, noted that brands were comfortable generating content and managing native ads internally and said this presented a challenge to agencies.
"Agencies need to envisage how they can add maximum value for their clients' campaigns, and in turn establish their most viable business model as this multi-billion dollar marketplace becomes fully liquid," he said.
He added that it was also important that all parties involved – brands, agencies, regulators, the ad tech community – worked to establish best practice regarding the labelling of sponsored content and other forms of native advertising.
Some 79% of publishers were already clearly labelling native advertising campaigns to distinguish them from editorial content. As a result, the majority of publishers (82%) and brands (71%) surveyed had not received complaints as a result of native advertising campaigns, but that still left a minority of complaints that had the potential to damage the reputation of the technique.
Data sourced from Hexagram; additional content by Warc staff