The rise of sponsored content: ‘Native ads’ to overtake traditional ads in 12 years (infographic)

23/10/2013

Native advertising will become the most preferred form of advertising by 2025, taking the form of sponsored content across all media platforms, according to a new study by AOL UK.

AOL UK’s “The Native Age” study combines a range of consumer and industry insights and opinions to define a new era of native advertising.

The study reveals a new breed of consumers, Generation N: a fast-moving, tech-savvy, multi-screening generation, who are increasingly attracted by the engaging, useful and entertaining content emerging through native advertising.

Generation N will hugely affect decisions made by advertisers, marketers, journalists and editors, both in the present and future. In the Native Age, collaboration becomes essential as brands and agencies will need to seek out editorial skill-sets and the gap between advertising and journalism diminishes.

Key findings from The Native Age

• AOL UK have defined native advertising as “sponsored content, which is relevant to the consumer experience, which is not interruptive, and which looks and feels similar to its editorial environment”

• Native advertising is crucial for reaching a younger audience. Young people already find native advertising more engaging than traditional adverts

• Preference for native will overtake traditional advertising by 2025. With today’s younger generation showing a greater predilection for native advertising, and the trend towards online interaction growing, our demographic modelling shows this is highly likely

• Creativity and entertainment are essential, with an “editorial first” approach key to a successful native campaign

• For true native advertising to work, the content must be relevant to the consumer experience and sit naturally alongside the editorial

• Native advertising offers media owners new ways to increase revenues by offering the crucial editorial skillset that can make native content so effective

• Consumers must be aware the content has been sponsored by a brand - native advertising must be clearly signposted

• Social media plays an important role in native advertising to deliver scale and engagement with brands, but based on our definition it can never be classified as truly native.

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Key Statistics from the Native Age

• The 18-24 age group says interesting and useful content is most likely to make them interact with a brand or company online (35%), followed by entertaining and fun content (28%)

• 75% of consumers across the board say online ads should be less forced

• Published brand content is most likely to make a brand appeal to the 18-24 age group (26%), followed by Facebook sponsored stories (22%) and only 9% favouring standard display ads

Noel Penzer, AOL UK Country Manager, said: “We have been working with brands for some time at AOL to create unique market-leading native solutions across our publishing platforms. Native advertising may well be the latest advertising buzzword, but our research proves this emerging advertising channel will become a force to be reckoned with, offering a highly effective platform for brands and a growing revenue stream for the media owners willing to adapt and embrace it. The results of our study show that media and advertisers need to lead the way forward in this Native Age.”

Carla Buzasi, Editor-in-Chief of AOL UK and The Huffington Post UK, said: “As a media owner and publisher, we see the opportunity for brands to capitalise on the platforms we are building editorially. As audiences get smarter about the kind of content they consume, advertising needs to look outside its own world and target those with the experience and knowledge to deliver it. Native advertising formats are hugely effective on The Huffington Post - a site where users expect, and enjoy consuming, quality content that resonates with their passions and interests.”

The Research

AOL UK conducted in-depth interviews with a variety of industry experts, including media owners, journalists, brand marketers, marketing directors and agency heads, to gain a true understanding of native advertising and how best to use it. A consumer survey of 2,000 people was also carried out in order to ascertain current engagement with brands online and the perception and appeal of native advertising versus traditional advertising.

“The Native Age” was launched today by AOL UK at the Soho Hotel in London, with a panel discussion involving Carla Busazi; Nick Cohen, Managing Partner of MediaCom; Phil Reay-Smith, Head of Media at Ogilvy PR and Sean King, CEO of Seven.

To find out more about “The Native Age” and download the full white paper, visit the dedicated hub here.

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