Native Advertising: A Golden Business Opportunity!

9 Jan, 2020

Rapid globalization and technological developments have led to the increase in demand for design, research, promotional and consulting services; in particular, the advertising services sub-segment of the global professional services market is set to experience more than 7% year on year growth to 2022. The advertising services industry is experiencing an increasing demand for native advertising- content which resembles the editorial style of a publication, but is paid for. In 2016, the Native Advertising Institute and the International News Media Association (INMA) conducted the “Native Advertising Trends 2016: The News Media Industry” study. Almost 76% of media executives surveyed globally in 2016 were positive towards native advertising. Moreover, more than 86% of readers in the survey were also in favor of native advertising. According to the survey, 89% of media agencies stated that native advertising was important or very important to their company. Almost 31% of them reported that native advertising was more important and successful than paid social media advertisements as well as programmatic advertisements. The report states that 77% of ad firms see online articles and blogs as the most effective type of native advertising, followed by print media, video advertisements, Facebook, and infographics.

According to the same study, Forbes Media reported that its native advertising branch is its second most lucrative advertising source, earning 30% of the company’s revenues. With changing consumer preferences for more subtle advertisements, and relevant and engaging content, there is an increasing demand for new and effective ad units. The study reports that publishers are experiencing a significant growth in native advertising revenues, and the trend is expected to grow in the coming period as well. Going forward, more than 33% of revenues of magazine publishers is expected to come from native advertising. More than 46% of ad publishers surveyed already offer native advertising services, and 41% of them are likely or most likely to add it to their advertising options.

The advertising services market will benefit from the increasing demand in native advertising services, which will consequently drive the global professional services market. In 2019, the overall professional services market was valued at $6,210 billion. The market is expected to grow to $8,000 billion by 2022, growing at an annual rate of around 9%.

Going forward, advertising service providers are expected to change their native advertising operations. Native ad studios are becoming increasingly popular as 33% of advertisement publishers worked through their own native ad studios, according to the 2016 study. Almost 42% of respondents had their own editorial team while 28% reportedly outsourced a native ad team. Currently, almost 54% of ad agencies sell native advertising services in combination with other services, while 46% sell it as a separate product. Native advertising is expected to fetch more revenue for establishments in the advertising services industry as almost 65% of respondents reported to charge more for such services than traditional advertising services.