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BizReport : Advertising archives : April 12, 2016

63% of mobile display ads will be native by 2020

New research conducted by global business analysts IHS, commissioned by Facebook's Audience Network, reveals native advertising's impressive growth and how today's most successful mobile marketers have already made the switch.

by Helen Leggatt

According to the IHS research, which included in-depth interviews with leading publishers, game developers, app developers, agencies, music services, ad networks and tech vendors across 25 countries in Europe, the Americas and APAC, nearly two-thirds (63.2%) of all mobile display ads will be native by 2020, driving $53 billion in total advertiser spend.

Third party in-app native advertising (native advertising that is operated and served by a third party onto a publisher's inventory) will be the fastest growing format and a key driver of mobile advertising. IHS findings reveal this format will grow at an annual rate of 70.7% and will account for 10.6% of all mobile display ads with revenues reaching $8.9 billion by 2020.

Higher engagement rates are what will fuel the rise of native ad units, says the report. Engagement rates are 20% to 60% higher on native ads than banners and drive 3x higher retention rates. The Facebook Audience Network says CPMs are 7x higher for native ad units compared to banners.

It's no surprise, then, to learn that the percentage of apps using native ad formats on the Audience Network has grown ten times from Q1 2015, and they now make up 83% of our entire network. In fact, more than 50% of apps on the Audience Network are using native ads exclusively.

Tags: advertising, mobile, native mobile ads

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