Miley Cyrus, the Harlem Shake, and the Batkid are only a few things that come to mind when thinking of 2013. As we welcome the new year, we’re also saying farewell to one of our “must watch” TV favorites Breaking Bad – yes, this
is a heart breaking experience. And, while pop culture has seen a few entertaining (and bizarre) events, what can be said about the advertising industry?
We took a hard look and summarized what we thought are the themes of 2013: native ads led by social media, viewability, and increased digital advertising spending.
Social Media Leading Native Advertising
Social media was on the cutting edge once again this year, but this time through native advertising.
Twitter jumped on the native wave in 2010, and in 2013, social media powerhouses Instagram and Pinterest followed suit as they launched their own versions of native advertising last year.
As you already know, native ads blend into the newsfeed or stream of user content. For instance, Instagram’s native ads appear just like a user post – except for the sponsored icon above the ad.
Compared to traditional banner ads, native ads have a significantly higher click-through rate. According to MediaPost “…native ads represented just 5%-to-10% of Facebook’s impressions in 2013, but accounted for more than 60% of the company’s revenue”. The high click-through rates isn’t the only thing driving native advertising formats or “in-stream” formats. According to the BI, “In-stream native ads look, feel and function seamlessly across mobile and PC, which is precisely what brands want, as they seek to build cross-device campaigns”.
With all its advantages, it’s understandable that JP Morgan predicts that the success of native advertising won’t end in 2013, but that it will dominate digital in 2014.
In 2013, a study by ComScore reported that a shocking 54% of display ads are not seen.
As increasingly disappointing viewability studies surfaced, and as the IAB continued to develop the 3MS (Making Measurement Make Sense) standard, viewability became a hot topic in 2013.
Current status: after diligently testing and creating standards for more than a year, the MRC has lifted the advisory on viewable impressions transacting near the end of 2013. With the advisory lifted, it will be interesting to see how advertisers and publishers alike react to the shift in 2014.
Ad spending is another trend to be aware of when reflecting on 2013, with traditional advertising slowly being displaced by digital.
According to new research from Forrester, traditional ads still hold the biggest slice of the budget pie, but many marketers plan on increasing and focusing on digital ads this coming year. In 2014, marketers are planning to increase spending for digital advertising by 52%, and 63% of marketers will decrease spending on traditional advertising in order to increase funding for digital ads.
The main reason for this shift is the expense of traditional advertisements and the “satisfying revenue results” from digital ads as 77% either met or exceeded their revenue goals in 2013. Even in this past year, online videos have increased 205% since the year before. Mobile ads have also been successful in 2013 as mobile ad revenue exploded.
As we harlem shake our way out of 2013, what new trends do you think will surface in 2014?