FIPP NAI rapport2018 - Native Advertising Institute...AFP Broadcast (Advertising Funded Programs) 3% Paid search for content 11% Paid email distribution 35% Paid inﬂ uencer distribution

NATIVEADVERTISINGTRENDS 2018 – The Magazine Industry

Photo by Mattias Diesel on Unsplash

Welcome to the 2018 edition of ourannual report on the native advertising trends in the magazine industry.

It’s the third time we’ve conducted this survey - this time among 150 executives from 41 countri-es - and we have some very exciting fi ndings to share with you.

Native advertising has been on every magazine executive’s radar for at least the past fi ve years and for very good reason. Though the hype might be wearing o� , native advertising has become an extremely important part of the business strategy for many publishers.

This year, we’ve seen a dramatic increase in the fi nancial importance of native advertising. On average, native made up 31% of overall advertising revenue for magazine publishers in 2017—up from 21% in 2016.

It’s no surprise, then, that this has lead to increased expectations among publishers for the 2018 results respectively. 69% of the magazine publishers expe-ct that native will have driven more of their annual advertising revenue this year than last year, and they expect native to drive 46% of their total annual

Jesper LaursenFounder

Native Advertising Institute

James HewesPresident & CEO

FIPP – the network for global media

advertising revenue in three years. This is up from the 2017 three-year projection of 40%.

One reason for the growing importance of native advertising might be that publishers are increa-singly able to place native ads at higher price points than traditional ones. 61% of publishes char-ge more for native advertising. This is up from 56% last year. Only 12% of publishers charge less for native ads, a number which has remained stagnant since last year.

Revenue is not the only thing that’s growing when it comes to native advertising and magazine publis-hers. So are investments in studios, along with competencies and confi dence levels of publishers. Magazines are holding their heads up high in terms of native advertising and rightfully so. It is impressi-ve what the industry is achieving.

We hope you enjoy diving deep into these fi ndings and many more to come.

Enjoy.

2Native Adver tising Trends 2018 The Magazine Industry

TABLE OF CONTENTSINTEGRATION 5 How important is native advertising to your company? 6 What are your feelings toward native advertising? 7 How likely are you to use native advertising as an advertising or service option? 8

BUDGETS 9 Of your overall advertising revenues, what percentage came from native advertising in 2017? 10 Of your native advertising revenues, what percentage came from print in 2017? 11 Of your overall advertising revenues, what percentage do you expect will be from native advertising in 2018? 12 Of your native advertising revenues, what percentage do you expect will be from print in 2018? 13 Of your overall advertising revenues, what percentage do you expect will be from native advertising in 2021? 14 Of your native advertising revenues, what percentage do you expect will be from print in 2021? 15 The percentage of the overall advertising revenue coming from native advertising compared - 2016, 2017 and 2021 16

SALES & SERVICES 17 What products and services related to native advertising do you provide your customers with? 18 How do you provide native advertising solutions? 19 How do you sell your native advertising solutions? 20 Do you have dedicated sales teams for native advertising? 21

How do you price native advertising vs. traditional advertising? 22


MEASUREMENT & EFFECT 23Which stage of the buyer’s journey are you creating native advertising for? 24

What do you consider to be the most e� ective type of native advertising? 25 How do you measure the e� ect of native advertising? 26 Do you think that native advertising adds value to your readers and viewers? 27

OPPORTUNITIES & THREATS 28What are the biggest native advertising opportunities for your company? 29

What are your greatest strengths, when it comes to native advertising? 30 What is your biggest challenge regarding native advertising? 31 What do you consider the biggest threat to native advertising? 32 Have you received any customer complaints from working with native advertising? 33 How do you label native advertising? 34

ABOUT THIS REPORT 35

TA B LE O F C O NTE NT S


INTEGRATIONAfter testing the waters for a few years now, many publishers have made native advertising a fully integrated part of their business model. Smaller and more niche publishers are still somewhat hesitant, but most major publishers are all in.

There are several indicators that this is the case, evidenced by both budgets and organizational structures. And then there is the attitude. 80% are positive and only 5% are negative. 51% even call it ‘very important’ - up from 46% last year - and another 41% call it important.

Native Adver tising Trends 2018 The Magazine Industry 5

Native Adver tising Trends 2018 The Magazine Industry

How important is native advertising to your company?

I NTE G R ATI O N

8%

41%51%

Not important

Important

Very important

6


What are your feelings toward native advertising?

I NTE G R ATI O N


Positive Neutral

Negative

15%5%

80%

7


How likely are you to use native advertising as an advertising or service option?

I NTE G R ATI O N

Not likely Less likely Likely Most likely We already do

55%

16%23%5%1%

Not likely Less likely Likely Most likely We already do

55%

16%23%5%1%

8

BUDGETSNative advertising has been seen, by many publishers, as the saviour that’s supposed to make up for declining revenue in other parts of the business. To some, it already has. To others, it’s proven a labour-intensive journey making it fi nancially successful.

Budgets are, however, where we fi nd the biggest surprise this year. On average, native made up 31% of overall advertising revenue for magazine publishers in 2017—up from 21% in 2016. And 69% of the magazine publishers expect that native will have driven more of their annual advertising revenue this year than last year. In 2021 publishers are expecting that number to climb to 46%.



Of your overall advertising revenues, what percentage came from native advertising in 2017?

B U D G E T S

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

10%

26%19% 17%

5% 7% 3% 2% 3% 1%7%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

10%

26%19% 17%

5% 7% 3% 2% 3% 1%7%

10


B U D G E T S

Of your native advertising revenues, what percentage came from print in 2017?

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

31%

13% 10%5% 3% 7% 6% 8% 6% 8%

3%

11

Of your overall advertising revenues, what percentage do you expect will be from native advertising in 2018?

B U D G E T S


More than last year 69%

28%

3% Less than this year

The same as last year

12

B U D G E T S

Of your native advertising revenues, what percentage do you expect will be from print in 2018?


29%

43%

28%Less than last year

The same as last year

More than last year

13

B U D G E T S

Of your overall advertising revenues, what percentage do you expect will be fromnative advertising in 2021?


0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2%

8%

14%17% 16%

11% 11%

5% 5% 4%7%

14

Of your native advertising revenues, what percentage do you expect will be from print in 2021?

B U D G E T S

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

24%

13%9%

14% 12% 12% 8% 5%1% 1% 1%


0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

1%0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

1%0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

1%0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

5%0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

8%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

12%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

12%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

12% 12%9%14% 12%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

14% 12%9%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

9%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

13%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

24%

13%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

13%

15


B U D G E T S

The percentage of the overall advertising revenue coming from native advertising compared - 2016, 2017 and 2021

21%31%

46%

2016:

2017:

2021:

16

SALES AND SERVICESHow to organise around native advertising has been another hot sub-topic in the industry for a while now. Should there be a dedicated sales team? Should we have a studio? And how do we price our services?

This chapter provides some great insights on this. Compared to last year’s report, there seems to be a shift away from using editorial teams (55% down from 65%), toward having either an in-house studio (36% up from 24%) or a separate native ad team (24% up from 21%). Further, more and more are getting dedicated sales teams (29% up from 11%).


What products and services related to native ad-vertising do you provide your customers with?

S A LE S A N D S E RV I C E S

68%Video contentWritten content 86%


7%Other

47%Events and experience

8%AFP Online Media (Advertising Funded Programs)7%Other

3%AFP Broadcast (Advertising Funded Programs)

11%Paid search for content8%AFP Online Media (Advertising Funded Programs) 8%8%AFP Online Media (Advertising Funded Programs)AFP Online Media (Advertising Funded Programs)

35%Paid email distribution

25%Paid infl uencer distribution29%Content solutions on client’s platforms

25%25%

43%InfographicsEvents and experience

43%Infographics

48%Layout47%47%Events and experience

35%Research35%

Infographics35%ResearchResearch

49%Strategy

20%Media buying on other traditional media platforms than your own11%Paid search for content 11%11%Paid search for contentPaid search for content

Paid infl uencer distributionPaid infl uencer distribution20%Media buying on other traditional media platforms than your ownMedia buying on other traditional media platforms than your ownMedia buying on other traditional media platforms than your own

31%Media buying on other social media platforms than your own29%29%Content solutions on client’s platformsContent solutions on client’s platforms

Paid email distributionPaid email distribution

Content solutions on client’s platformsContent solutions on client’s platforms31%31%Media buying on other social media platforms than your ownMedia buying on other social media platforms than your ownMedia buying on other social media platforms than your own

48%Multi-platform storytelling48%48%LayoutLayout48%48%Multi-platform storytellingMulti-platform storytelling

50%Multi-media storytelling49%49%49%StrategyStrategy

3%VR (Virtual Reality)AFP Broadcast (Advertising Funded Programs)AFP Broadcast (Advertising Funded Programs)

3%VR (Virtual Reality)VR (Virtual Reality)

6%AR (Augmented Reality)3%3%AFP Broadcast (Advertising Funded Programs)

AR (Augmented Reality)7%AI (Artifi cial Intelligence)7%Other

AFP Online Media (Advertising Funded Programs)

6%

7%

6%6%AR (Augmented Reality)7%7%AI (Artifi cial Intelligence)

50%50%50%Multi-media storytellingMulti-media storytelling68%

86%68%

Written contentVideo content

18


How do you provide nativeadvertising solutions?

7%Advertiser’s agencies

9%External agency partner

14%Other

24%Separate native ad team

Own native ad studio 36%55%Editorial team


7%Advertiser’s agencies

External agency partner 9%

Other 14%

Separate native ad team 24%

Own native ad studio 36%55%Editorial team

19

How do you sell your native advertising solutions?


In combination with traditional

advertising

As a separate product

63%37%


Do you have dedicated sales teams for native advertising?



No

Yes

29%

71%21


How do you price native advertising vs. traditional advertising?


The same

Higher

Lower

61%27%

12%

22

MEASUREMENT AND EFFECTSetting the right KPIs and measuring the e� ect of native advertising has long been one of the big tasks on the agenda for magazine publishers - and everybody else working with native advertising for that matter.

Tra� c (67%) and audience engagement (73%) are still by far the most popular KPIs. They are simply prerequisites for success. Advertisers, though, are often times looking for ‘harder’ conversion metrics. Maybe that’s why using sales as a metric has seen a slight lift, from 26% to 28% and why purchase intent is being used in 17%, up from 10%.


Which stage of the buyer’s journey are you creating native advertising for?

M E A S U R E M E NT A N D E F F E C T


73%Top-of-funnel (Awareness)

61%Mid-funnel (Consideration)

31%Bottom-of-funnel (Decision)

6%Other

24

What do you consider to be the moste� ective type of native advertising?


Advertorials online 26%Infographics 26%

Promoted posts on Facebook 33%Printed articles 47%Video content 68%Online articles 69%


26%Infographics

Advertorials online26%

Promoted posts on Facebook

Infographics 26%33%33%Promoted posts on Facebook

47%47%Printed articles68%69%68%

Online articles 69%Video content

21%16%15%

8%5%4%4%3%3%

1%

Promoted posts on Instagram

Programmatic distribution

Advertorials o� ine

Promoted tweets on Twitter

Promoted tweets on LinkedIn

Other social media

Other

Paid search for content

AFP Online Media (Advertiser Funded Programs)

AFP Broadcast (Advertiser Funded Programs)

25


How do you measure the e� ectof native advertising?


4%10%11%12%

17%19%

28%32%

39%41%

67%73%

Other

We don’t measure our native advertising

Permissions collected

Tra� c Source

Purchase intent

Brand recall

Sales

Brand awareness

Sharing

Time Spent

Tra� c

Audience engagement

26


Do you think that native advertising adds value to your readers and viewers?


I don’t know

Yes No

10%84% 6%

27

OPPORTUNITIES & THREATSAnother topic that keeps popping up - and for good reason - is the transparency and labelling issue. It’s crucial for us as an industry to maintain a good relationship, built on trust, with our audiences, advertisers and the authorities.

Despite awareness around the issue and the fact that 34% of the respondents name poor labelling as the second biggest threat to native advertising, this year’s report shows that too many magazine publishers, more or less, consciously keep operating in a grey or even black zone. 14% do not label native advertising at all, up from 10% last year. This needs to change.


What are the biggest native advertising opportunities for your company?

O P P O R TU N ITI E S & TH R E AT S

Written contentVideo content

Multi-platform storytellingMulti-media storytelling

Audience dataStrategy

Events and experienceResearch

Paid infl uencer distributionLayout

InfographicsMedia buying on other social media platforms than your own

Content solutions on client’s platformsMedia buying on other traditional media platforms than your own

Paid email distributionAI (Artifi cial Intelligence)AR (Augmented Reality)

VR (Virtual Reality)Paid search for content

Other AFP Online Media (Advertising Funded Programs)

AFP Broadcast (Advertising Funded Programs)

64%61%

37%35%35%

33%33%

21%17%17%16%15%15%

13%13%

8%7%6%5%

3%2%1%


1%AFP Broadcast (Advertising Funded Programs) 1%2%2%AFP Online Media (Advertising Funded Programs) 2%3%3%2%

Other 3%2%2%

5%5%3%

Paid search for content 5%3%3%

6%6%5%

VR (Virtual Reality) 6%5%

VR (Virtual Reality)5%

7%7%6%

AR (Augmented Reality) 7%6%

AR (Augmented Reality) 7%6%

8%8%7%

AI (Artifi cial Intelligence) 8%7%

AI (Artifi cial Intelligence) 8%7%

13%8%

Paid email distribution8%8%

13%13%

Media buying on other traditional media platforms than your own 13%13%

Media buying on other traditional media platforms than your own15%

13%Content solutions on client’s platforms 15%Content solutions on client’s platforms 15%

13%

15%15%

Media buying on other social media platforms than your own 15%15%

Media buying on other social media platforms than your own 15%15%

16%15%16%15%

Infographics 16%Infographics 16%15%

17%16%

Layout 17%16%

Layout 17%16%

17%17%

Paid infl uencer distribution 17%17%17%17%

21%21%17%

Research17%

33%21%

Events and experience21%

Events and experience33%33%

Strategy 33%33%

Strategy35%

33%Audience data 35%35%

33%

35%35%

Multi-media storytelling 35%35%

Multi-media storytelling 35%35%

37%35%37%

35%Multi-platform storytelling 37%Multi-platform storytelling 37%

35%

64%61%

Written content61%

37%Video content

37%37%

29

What are your greatest strengths, when it comes to native advertising?


8%Other

13%Single-platform storytelling

19%A native ad studio

22%Documented native advertising results

22%Audience data

28%A specialised sta� for producing native advertising

47%Knowledge about audience preferences and behaviours

50%Multi-platform storytelling

59%General editorial expertise

60%Existing brands and audience relationships


8%Other 8%13%

8%Other

Single-platform storytelling 13%19%

13%Single-platform storytelling

A native ad studio

Single-platform storytelling

19%22%

19%A native ad studio

Documented native advertising results

A native ad studio

22%Documented native advertising results

22%Audience data

Documented native advertising results

22%28%

22%Audience data

A specialised sta� for producing native advertising

22%Audience data

28%47%

28%A specialised sta� for producing native advertising

Knowledge about audience preferences and behaviours

A specialised sta� for producing native advertising

47%50%

47%Knowledge about audience preferences and behaviours

Multi-platform storytelling

Knowledge about audience preferences and behaviours

50%59%

50%Multi-platform storytelling

General editorial expertise

Multi-platform storytelling

59%60%Existing brands and audience relationships

59%General editorial expertise

60%Existing brands and audience relationships

General editorial expertise

30

4%Getting management buy-in

What is your biggest challenge regarding native advertising?


7%Other

12%Organising the native ad team

19%Creating e� ective strategies

21%Training sales team

23%Convincing advertisers to buy native advertising

23%Proving the e� ectiveness of native advertising

23%Getting media agencies involved in native advertising projects

Explaining native advertising to advertisers 23%25%Pricing native advertising

31%Producing engaging native advertising content45%Convincing advertisers to tell real stories


4%Getting management buy-in 4%7%

4%Getting management buy-in

Other 7%12%

7%Other

Organising the native ad team

Other

12%19%

12%Organising the native ad team

Creating e� ective strategies

Organising the native ad team

19%21%

19%Creating e� ective strategies

Training sales team

Creating e� ective strategies

21%23%

21%Training sales team

Convincing advertisers to buy native advertising

Training sales team

23%Convincing advertisers to buy native advertising


Convincing advertisers to buy native advertising





Explaining native advertising to advertisers 23%23%Getting media agencies involved in native advertising projects

23%25%

Explaining native advertising to advertisers 23%Pricing native advertising

Explaining native advertising to advertisers 23%25%

31%25%Pricing native advertising

Producing engaging native advertising content

Pricing native advertising31%

45%Convincing advertisers to tell real stories

31%Producing engaging native advertising content

Convincing advertisers to tell real stories

Producing engaging native advertising content

31

O P P O R TU N ITI E S A N D TH R E AT S

What do you consider the biggest threat to native advertising?

Poor client understanding 47%Poor labeling 34%

Lack of seperation of the editorial and the commercial side of business 30%Limited budgets from clients 27%

Lack of proof of e� ectiveness 24%That native advertising risks being associated with ”fake news” 23%

Lack of engagement from readers/viewers 23%Lack of control over the content (i.e. clients having too much infl uence) 22%

Too time-consuming 21%Ad blocking 20%

Lack of knowledge/skills in our company 9%Lack of su� cient buy-in from the organisation and/or top management 7%

Privacy and data concerns 7%GDPR 6%Other 5%


5%Other 5%6%

Privacy and data concerns

6%GDPR 6%

Lack of su� cient buy-in from the organisation and/or top management

7%7%Privacy and data concerns

7%7%Lack of su� cient buy-in from the organisation and/or top management

9%Ad blocking

9%Lack of knowledge/skills in our company

20%Too time-consuming

20%Ad blocking

21%Lack of control over the content (i.e. clients having too much infl uence)

21%21%Too time-consuming

22%Lack of engagement from readers/viewers

22%22%Lack of control over the content (i.e. clients having too much infl uence)

That native advertising risks being associated with ”fake news”

23%23%Lack of engagement from readers/viewers

23%Lack of proof of e� ectiveness

23%That native advertising risks being associated with ”fake news”

24%Limited budgets from clients

24%24%Lack of proof of e� ectiveness

27%27%Limited budgets from clients

30%30%Lack of seperation of the editorial and the commercial side of business

47%34%

Poor client understanding

34%Poor labeling

32

O P P O R TU N ITI E S A N D TH R E AT S

Have you received any customer complaints from working with native advertising?


Yes No

85% 15%

33

How do you label native advertising?O P P O R TU N ITI E S A N D TH R E AT S

14%We don’t label

15%Other

15%”Sponsor generated content”

16%”Paid content”

25%”Advertisement”

27%By using di� erent look and feel

55%”Sponsored content”


14%We don’t label

Other

14%15%14%

”Sponsor generated content” 15%15%15%

”Paid content”

15%16%15%

”Advertisement”

16%25%

16%25%27%By using di� erent look and feel

25%27%

55%”Sponsored content”

27%

34

ABOUT THISREPORT Native Advertising Trends 2018 - The Magazine Industry was produced by Native Advertising Institute in collaboration with FIPP - the network for global media.

150 magazine executives from 41 countries across the globe participated in the survey. The report was published in December 2018.

About Native Advertising InstituteNative Advertising Institute is an independent think tank on a mission to help publishers, brands and agencies become successful with native advertising. We publish a blog, conduct research, and host the biggest native advertising conference in the world, called Native Advertising DAYS.

nativeadvertisinginstitute.com

About FIPPFIPP - the network for global media, represents content-rich companies or individuals involved in the creation, publishing or sharing of quality content to audiences of interest. FIPP exists to help its members develop better strategies and build better businesses by identifying and communicating emerging trends, sharing knowledge, and improving skills, worldwide.

fi pp.com


Documents

FIPP NAI rapport2018 - Native Advertising Institute...AFP Broadcast (Advertising Funded Programs) 3% Paid search for content 11% Paid email distribution 35% Paid inﬂ uencer distribution