We define native advertising as digital ads that match the visual design of a specific user experience, where they function and look like natural content on a platform. That encompasses a number of widely varying formats, including ads in social media feeds, content recommendation widgets, custom ads and sponsored content.
Per our forecast, US advertisers will spend $43.90 billion this year on native display ads—$8.66 billion more than they did last year.
While native will soon account for about two-thirds of all US display ad spend, that figure masks the near ubiquity of native ads on social networks. It also obscures the fact that, outside of social networks, more than two-thirds of display spend will not be native. Nonsocial native ads are typically purchased programmatically and seen on mobile phones.
However, the nonsocial side of the native ad market is quickly growing. We estimate that native will account for 30.8% of nonsocial display ad spend this year, up from 19.1% in 2017.
“Native formats have made significant inroads in channels like mobile apps, but there are still a lot of traditional display units being traded programmatically, especially on desktop and the mobile web,” eMarketer principal analyst Nicole Perrin said. “Taking into account the fact that in-stream video is by definition nonnative, we don’t expect native to completely take over display. And if social platforms are successful in attracting dollars to newer pre-roll and mid-roll formats, that could make their revenue mix less native as well.”
Although the nonsocial part of the native ad market is much smaller than the social side, some digital media companies have become reliant upon nonsocial native ads. Programmatic native advertising outside social networking platforms took hold a few years ago, and a number of ad tech vendors have worked to bring together ad buyers and sellers at scale.
In a November 2018 study of US publishers by Advertiser Perceptions, respondents reported that native accounted for an average of 31% of their programmatic ad revenues.