Why Every Social Network Should Be Betting On In-Stream, Native Advertising

The native-social rush is on. BIA/Kelsey estimates that social ad spend will reach over $10 billion by 2017 and that up to 40% or more of those outlays will go to native ads. In the social context, we define native ads as ads that are seamlessly integrated into a user's feed and are nearly indistinguishable from organic content.

On Facebook, native ads in the News Feed generate 49-times higher click-through rates and a 54% lower cost-per-click than traditional placements in the right-rail sidebar. LinkedIn is making major investments in its native strategy and Pinterest is piloting native ads on its platform.

For a new report, BI Intelligence spoke to leaders in the native advertising space, including major ad buyers, investors in up-and-coming social media networks like Pinterest, and social media analytics experts to understand the forces driving the stampede into native-social advertising. We examine the top formats, dig into Facebook's suite of native ad products, and look at how effective native-social ads can be.

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According to Jan Rezab, CEO of Socialbakers, a social media analytics company that works with Fortune 100 brands, "In the future, all advertising on social media will be native in-stream ads. The right rail and banners will disappear altogether."

Here's why experts are so bullish:

• 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.
• On mobile's smaller screens, the stream is the experience. Mobile ad spend was up 83% last year, to $8.9 billion globally.
• Twitter started the native-social ad trend with Promoted Tweets in early 2010. The social network is now among the most influential voices in arguing that TV and digital ad spend can work hand-in-hand.
• Twitter now offers a suite of three different in-stream native ad products.
• We believe image- and video-sharing networks such as Pinterest, Vine, and Snapchat will soon be offering some of the most effective types of native ads, centered on pictures. Photos are the most shared type of content on the Web; 43% of global Internet users have shared a photo in the past month.
• At BIA/Kelsey, which forecast that $11 billion would be spent on social ads in 2017 and 40% would go to native ads, Jed Williams, author of the forecast, said "If I was to re-forecast the native ad market today, would we project it growing larger at a faster rate? Certainly."

The report is full of charts and data that can be easily downloaded and put to use.

In full, the report:

• Compares the adoption of native-social ads by top brands and advertisers, and how committed they are to allocating spend to each of the social networks
• Looks at what native advertising might look like on Snapchat, Pinterest, Vine, Instagram, the most image-centric social networks
• Discusses how native-social advertisements can be bought and sold in automated exchanges like Facebook's FBX
• Examines the data that proves the effectiveness of in-stream ads and their superior metrics relative to banner and display ads
• Explains why market research firms have underestimated how big the shift to native-social advertising has turned out to be
  

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