Native and Mobile Ads Draw High CPMs

The advertising landscape continues to shift. This time the news appears to be good for the publishers. MediaRadar’s newest study on advertising trends in 2016 and Q1 2017, which came out at the beginning of the summer, revealed that high CPM ad placements are on the rise (whew!), especially if they’re mobile or native; niche and enthusiast sites still flourish in print (along with regional titles,) and native ad placements have grown 74% in Q1 year over year.

Native ad formats have grown the most and command the highest CPMs. While many forms of native advertising are still frowned on,  the demand for native has nearly tripled since 2015. That’s partly because native ad formats typically escape ad blockers, but also because consumers don’t mind reading or viewing something that’s truly informational and isn’t interruptive. Native ads are predominantly  brand ads, and the further good news is that digital advertising has finally arrived at a point where it’s not all remnant inventory, performance ads, and low CPMs. This will allow digital advertising to be effective at points nearer the top of the funnel.(If there is still a funnel at all). For now, native seems to outperform more traditional ad units.

As for print advertising, it still hasn’t gone away, although spend did decline 8% year over year. While general interest titles are languishing, niche and regional publications appear to be on the rise. And many advertisers have begun to target smaller volumes of engaged users over sheer reach.

This seems counterintuitive to us, but we’ve observed it ourselves: programmatic buying has declined. In fact it’s down 12%, and we think it’s because media planners are tired of not knowing where their ads are going to be seen. Brand safety is one of the problems, and the other is viewability.  Viewability is the new currency for advertisers and it’s tough to track viewability accurately with programmatic buying. Brands really need to buy programmatically, however, because it’s far less effortful, especially for large buys. We think the market will settle somewhere around programmatic direct, which allows far more control than simple programmatic.

If the current market trends continue, publishers should see increases in revenues, brands should see growing effectiveness of ad spend, and consumers should be less annoyed by formats that offer little else than interruption.