The explosive growth of native advertising

This post also published on the BrightRoll blog.

Recently on the BrightRoll blog, we’ve given an overview of native advertising and an introduction to OpenRTB 2.3, through which buyers plugged into the BrightRoll Exchange can access native inventory. Earlier in February, we hosted the Mobile Developers Conference in San Francisco, where we presented that native advertising, particularly in-app placements, has seen explosive growth. The presentation was focused on the general state of native advertising, specifically with regard to third-party mobile apps who have integrated advertising demand from Yahoo Gemini—Yahoo’s marketplace for search and native advertising.

We’ve condensed that information into three key points:

Native is Delivering Superior Performance for Publishers

Native advertising delivers exceptional performance for publishers. In 2015, publishers with integrated native advertising in the US saw eCPMs (effective cost per thousand impressions) consistently in the $3.50 to $4.00 range, despite the enormous growth of native requests. In the rest of the world, native publishers with Yahoo App Publishing consistently saw eCPMs at a greater than $2.00 value. Additionally, the click-through rates on native placements averaged 1.3%, with some verticals as high as 4%—at least twice the rate of traditional display ads.

What does this mean for publishers? Simply put, publishers can reduce ad load—improving user retention and satisfaction—by integrating higher-performing native ads on their publications.

Native’s Expanding Reach Around the World and Across Verticals

Native ads rolled out enormously on a global scale. Over 350 billion native ad requests are made each quarter (Yahoo App Publishing data, 2015). This creates an extraordinary opportunity for advertisers and DSPs around the world to reach audiences in their respective areas. This is particularly exciting in light of the recent integration of Yahoo App Publishing supply and the BrightRoll Exchange.

The earliest adopters of native advertising via Yahoo App Publishing were messaging applications. The mobile environment is constantly changing, and other verticals quickly introduced content streams similar to messaging apps in their mobile applications, the perfect environment for native ads. Messaging apps, which made up 99% of ad requests in Q1 of 2015, dropped to 48% of requests in Q4, the rest composed of weather, music, entertainment, news, tools, utility, gaming, and health and fitness apps.

The Card is Mightier than the Pencil

The two predominant formats for native advertisements based on Yahoo data are pencils and cards. Pencils are smaller-footprint placements that resemble banner ads, while cards are larger, image-rich units. As app platforms diversify away from quickly-digestible newsfeeds toward richer content verticals, ad requests are shifting toward cards—the larger format native ads. In fact, cards accounted for 87% of ad requests in Q4 of 2015, and for good reasons. Cards significantly outperform pencils, converting at 209% the rate of their smaller counterparts.

The Bottom Line

Native advertising is, at this point, and almost-necessary piece of any digital ad campaign. We have found that, across applications, card-formatted native ads provide excellent results for advertisers and publishers alike. For more information, visit developer.yahoo.com to get started on monetization.