Yahoo: Native Ads Drive 3.6X Lift In Branded Search Vs. Conventional Display

As one part of its growth strategy, Yahoo has bet heavily on native ads. The company’s Gemini platform offers both mobile search and in-stream/native display ads to marketers. Yahoo also says its native ads perform much better than conventional display ads.

Forecaster eMarketer has estimated the market for native ads in the US will be worth roughly $5 billion by 2017.

During the recent IAB event in Phoenix, Arizona Yahoo walked me through consumer research that supports its native ad consumer claims and offered some best practices advice. As a general matter, the company said that 60 percent of consumers “feel positive about native ads.”

In the past I’ve been skeptical about native ads and whether consumers are often unable to distinguish them from editorial content. Yahoo disputes this and says that transparency actually improves native ad performance.

Source: Native Advertising Report, Native Advertising Perceptions & Trends, Advertiser Perceptions, July 2014

Research from the 614 Group found that 69 percent of marketers saw native ads as valuable. And a July 2014 “Advertiser Perceptions” study found that roughly 80 percent of advertisers were intending to buy native advertising this year.

As an aside it’s interesting to note that not all advertisers in the survey above were planning to buy search or mobile. Both really should be universal or nearly universal.

Source: Yahoo/MillwardBrown Digital Behavioral Impact AdFx Study May 2014

Yahoo says aggregate metrics and case study data demonstrate that native ads dramatically outperform conventional display ads in driving advertiser site visits and follow-up search activity. For example, as the chart above illustrates, there was a 204 percent improvement in later branded search queries based on prior exposure to branded native ads.

In a mobile context specifically Yahoo reported that “effectively integrated [native] ads gain 3X more attention than non-native mobile ads. In addition the company said that mobile native ads see a 2.6X higher CTR than other Yahoo mobile display ads.

Source: Ad Environments- The Halo Effect, Yahoo & Innerscope, September 2014

In contrast to my suspicions about native ad success being about consumer confusion or “deception,” Yahoo says that increased transparency about sponsored content actually improves performance, assuming contextual relevance.

The company found that when ad copy was changed and brand logos were added to sponsored content to improve transparency, awareness, brand favorability and purchase intent all improved.

Source: Yahoo/Ipsos CPG Gemini Mobile Native Advertising Effectiveness Study, via Forced Exposure, October 2014