Native Ad Spending To Jump Despite Marketer Reservations

Ford, HP, Kimberly-Clark, GE Weigh In On Business Slated To Hit $4.3 Billion Next Year

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A native ad for GE running on BuzzFeed.
A native ad for GE running on BuzzFeed.
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Marketers are bullish about native advertising in 2015, with executives from top brands -- including Ford Motor Co., Kimberly-Clark, General Electric and Hewlett Packard -- telling research firm eMarketer they plan to boost outlays around the tactic in the next year or more.

"I would expect our spending in this area to increase considerably over the next 18 months, specifically in the area of video," said Ed McLoughlin, HP's director of strategy and planning-global media and digital marketing.

"We just dipped our toe into the water this year, but I would say we'll see a five- to 10-times increase over what we spent this year," said Matt Eaves, VP-engagement at Cancer Treatment Centers of America. Native advertising is "definitely becoming a line item in the budget that we'll have dedicated dollars to put against because I believe it's working," he added.

Underscoring these statements from Messrs. McLoughlin and Eaves -- which appear in an eMarketer report out today -- are forecasts predicting marketers will spend $4.3 billion on native advertising in 2015, a 34% increase from this year, according to eMarketer. That number is expected to reach $8.8 billion by 2018.

"Traditional digital advertising has become wallpaper," Jason Hill, GE's global head of media strategy, said in the report. "It doesn't improve anyone's experience on a site and readers, myself included, pretty much look past it."

"Brands that have a strong point of view and great partners to help them express it can enjoy massive engagement" with native advertising, he added.

Native advertising is a tactic where ads mimic the editorial content surround them, whether that's an article, video or mix of text and images. These ads are typically marked promotional, although a lack of uniformity around the labeling has sown confusion among readers over what is and is not an ad.

Among marketers, however, the greatest concern about native advertising is how to reach the largest audiences possible. "It can be hard to scale," said Chris Whalen, VP-integrated media platforms at Kimberly-Clark. "Everything is very custom and it's hard to be agile."

"It's challenging to find scale in native if you're truly being authentic to your brand and staying true to your core values," said Anna Bonfiglio, Lincoln media manager at Ford Motor Co.

"What makes these opportunities unique and valuable is often what precludes you from scaling them," said Amanda Rubin, Goldman Sachs' managing director, global co-head-brand and content strategy.

Meanwhile, publishers are bulking up their headcounts to assist advertisers eager to create custom content and run it on the publishers' sites. The New York Times, Wall Street Journal, Washington Post and Time Inc., for instance, have all created or expanded existing departments for this purpose, following the footsteps of digital-only companies like Gawker and BuzzFeed, which have similar departments. Other media companies -- including The Daily Mail, Mashable and Refinery29 – have enlisted editorial employees to produce native ads.