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Native mobile ads in a strange land

By
March 18, 2015

Stephen Upstone is founder/CEO of LoopMe

Stephen Upstone is founder/CEO of LoopMe

By Stephen Upstone

The chances are that you have seen native mobile ads, but you just did not know. This is because, as the name suggests, they are ads that slot seamlessly into the interface of the application or site you are using.

The bad news is that sometimes, you do not even know they are ads. The good news is that the up-and-coming mobile format, the full-screen video ad, leaves you, the user, in no doubt that they are ads, and they work for advertisers and publishers alike.

The even better news is that the new king of mobile advertising, Facebook, thinks so too.

Ads up
If you have not heard of native ads, well you are forgiven. Take a look at Google Trends and you’ll see that, as a search term, native advertising was not around before 2013. Since then, with a few slight stutters, the underlying trend has pretty much been constant, going upward at a fairly steep angle.

Native ads even predate the Web. I am imagining that you, like me, can remember when you last started reading an interesting piece in a newspaper only to realize midway through that it was an ad. It looked like editorial content, it read like editorial content, but actually, it was an ad.

Should advertising not be distinct? If something is paid for rather than editorial, then why should it share the same space or appearance? Take a look at what The New York Times did with its first native ad: there is a clear distinction between advertising content and news by surrounding it with a border. It is native, but distinct. An inhabitant, but from a different tribe.

Contrast this with the opposite end of the spectrum, the so-called “masked native ad.” Marketing Week takes you through this eloquently and honestly, hand on heart, I did not even know these were ads until I started writing this piece.

Annoying, is it not? And this is the issue with native ads: they can tread a fine line between enhancing a user experience, and intruding upon it.

Face time
This is why I advocate the use of full-screen ads. Used in the right context, for example in the natural user journey of the levels between games, they fit the flow without bleeding into it. In this way they are much more honest and upfront.

If an ad takes up the entire screen, then not only is it more compelling – with up to 10 times the click-through rates of standard banner ads for example, according to our campaign data – then there is no mistaking it for anything other than an ad. It is not news. It is not an editorial. It is not even an “advertorial” so beloved of the marketing communications industry. It is an ad.

So it is interesting that Facebook’s new mobile video native ads look, well, full-screen.

Facebook pulled the plug on sponsored stories on April 9 last year amid earlier criticism that it was taking the concept of “people as product” a step too far. But if you are a frequent flyer of its mobile app, chances are you have already seen one of its replacement formats. And get this: they are video and, conspicuously, they take up almost the entire screen.

Facebook knows a thing or two about how to make mobile advertising work, having turned the company on a dime to transform it into effectively a mobile ad platform. As of July 2014 Facebook outperformed expectations as mobile accounted for 62 percent of ad revenues, up 61 percent from last year. So it is highly significant that it is embracing full-screen mobile ads among its native ad arsenal.

Why would Facebook do this? Sheryl Sandberg has already volunteered the reasoning behind Facebook’s video strategy, at least in part: “Video represents a really big opportunity, really driven by consumer behavior. Smartphones are getting better and faster, and more people have phones that can provide a great video experience.”

But there is also a mandate for video specifically with regards to mobile advertising as Ms. Sandberg continued: “There’s also a lot more video going through the feed that consumers are putting in, and that creates an opportunity for us both on the consumer side and on the ad side.”

I think Facebook simply wants to adopt the format that works most effectively. I have already mentioned the 10 times the CTR rate and that is certainly one for the advertisers to notice. They might also like to consider the 25 times cost per engagement rate we are seeing. But there are other benefits to full-screen mobile video.

Video gaga
For advertisers and brands, they already get video, especially when it is full-screen.

Instead of shoehorning ads into small banner sizes or adapting them for rich media, they have vast amounts of experience and collateral to draw upon. And with large format video, they can make the ads much more compelling. It is the closest experience to a television ad with mobile – and, incidentally, one that huge brands such as Procter & Gamble are reputedly investing in, shifting dollars from TV to video advertising.

For users, they also get video. They do not have the confusion of clicking different options for different results. If the full-screen video is right for them, with the right targeting, creative and message, then they know they just have to click to find out more. There is no confusion about where it fits in the often too obfuscating line between news and promotion.

And for publishers, as well as 10 times CTR they can also see increased CPM figures, both of which are reflected elsewhere in the mobile ad industry. Two years ago, hardly any premium mobile publishers carried full-screen mobile video ads. My prediction is that, as we see 2014 out, those that have not already adopted mobile video will be considering it.

As well as a mobile ad network, Facebook is also a huge testing ground for what works and what does not. And, as Facebook has found, and intends to leverage, full-screen mobile ads most certainly work. Video has usurped text, and overcome graphics, to become the new dominant mobile native in the land of Facebook.

And for the wider realm of mobile advertising, Facebook could be creating a tipping point.

As agencies start adding Facebook mobile video to media plans, this could open up mobile video advertising to the territory of brand advertising. Indeed, the natives could soon become the pioneers.

Stephen Upstone is founder/CEO of LoopMe, London. Reach him at stephen@loopmemedia.com.

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