• by Tobi Elkin , Staff Writer @tobielkin, June 29, 2016

The Association of National Advertisers (ANA) estimates that U.S. spending on native advertising will grow to $13.9 billion in 2016 and $21 billion by 2018.  Hobson Powell, Yahoo's vice president, optimization services, believes this growth will occur, and that native advertising has created powerful opportunities for marketers to reach consumers through more targeted and engaging content. He believes content can spur consumers to take action and convert.

Powell spoke with Native Insider about native advertising at Yahoo, which has conducted several studies to better understand what drives consumer engagement and to help marketers find more success with native advertising.

Native Insider:How would you characterize or describe native advertising within the context of Yahoo's business?

Hobson Powell: Native is a key priority for Yahoo. We know that these ads offer a positive experience for consumers and deliver great results for advertisers, and that’s continuing to fuel the growth of native advertising. We’re constantly working to help advertisers take advantage of a variety of native ad formats and offer them greater flexibility to leverage these ads through Yahoo Gemini and BrightRoll.

Native Insider:Yahoo has conducted studies on consumer engagement with native. What were some of the key findings, and how do they shape your thinking about native?

Powell: We believe native is helping to redefine the future of advertising. That’s why we’ve worked hard to make this ad format even more flexible and effective at driving results for a wide range of advertisers, whether their goals are focused on key brand metrics or performance-based objectives.

Our research from 2014 on the Yahoo Gemini platform shows that when native ads are seamlessly integrated with compelling content, they can increase purchase intent by 52%. And mobile native ads can boost top-of-mind unaided brand awareness by 114%.

As native ads have expanded to include video, we’ve also seen tremendous success in this area. A recent study showed that 15-second native video ads drive greater recall and purchase intent than longer ads.

What’s most important is designing an ad experience that keeps consumers engaged. Auto-start native video ads formats can drive 51% higher aided recall, 10% higher brand familiarity, and 4% higher affinity, compared to user-initiated video.

Native Insider:How does native function within Yahoo's advertising business?

Powell: Advertisers can work directly with their Yahoo account representative to purchase native ads. They can also access native ad inventory across Yahoo sites, apps, and third party publishers via Yahoo Gemini or through Yahoo Gemini API partners. Advertisers can also buy native ads from third-party app developers and publishers, such as Cheetah Mobile, via the BrightRoll Exchange.

Native Insider:Many argue that bespoke native advertising doesn't scale. But in-feed programs can scale. Can you elaborate a bit on this?

Powell: Advertisers want to partner with Yahoo precisely because we deliver native advertising at scale. Native is an incredible opportunity for advertisers to engage with a massive audience of consumers, while ensuring their ads are highly targeted. We not only offer native inventory across Yahoo’s top properties, but also across a network of third-party publishers and apps.

Native Insider:What are the key ingredients to compelling and successful native/branded content campaigns?

Powell: We’ve found that the key ingredients to a successful native campaign are: compelling content, reaching the right audience, and driving conversions.

In terms of content, that means using appealing images in native campaigns that inspire emotion, testing and refreshing ad copy to optimize ad performance, and using short, relatable video. Shorter video generates greater recall and purchase intent than longer videos.

We’ve found that the most successful native video ads are about 15 seconds long and use real-life situations that resonate with customers on a personal level. This allows for greater recall and purchase intent and ensures your brand is top-of-mind for consumers.

Native ads can deliver broad reach, but you need to make sure that you’re also delivering the right message, to the right person. Consider a full-funnel strategy that will attract new users and re-engage others. You can even use mobile advertising IDs or conversion tags to retarget previous users.

And to reach new audiences, features like lookalike modeling are effective in targeting audiences similar to your existing customer base. Reaching the right audience will mean re-engaging and retargeting previous visitors to your site. Mobile advertising IDs can be used target ads to consumer who have already downloaded your app but don’t use it regularly.

With respect to conversions, we believe that thinking mobile-first is the key. Mobile users will abandon a site that doesn’t provide the answer they’re looking for immediately, so optimize your landing page to be mobile-friendly and consider implementing new mobile experiences. For example, limit the number of steps or amount of typing required to complete a conversion.

Native Insider:How can native campaigns be used for retargeting successfully?

Powell:There are several ways native campaigns can be leveraged for successful retargeting. Mobile advertising IDs are a great way to target ads to users who have already downloaded an app, but aren’t frequently using it. Our research found that native ads are effective at prompting re-engagement and are 23 times more cost-effective than marketing to new users. Brands can also identify and retarget visitors based on their actions on their site by using a conversion tag in their campaign. Tailoring ad copy and images to speak specifically to these retargeted audiences is also important.

Native Insider:What challenges do you see with respect to native "standards"? There are lots of ad formats and approaches which make it hard for publishers. What would make it easier?

Powell:The ad industry and organizations like the Interactive Advertising Bureau (IAB) have been working together to provide helpful guidance on existing native ad opportunities, providing clarity and helping to eliminate confusion. Groups like the IAB Native Advertising Task Force have worked collaboratively to offer a framework based on the state of the industry, while providing flexibility as this dynamic marketplace continues to grow and innovate.

Native Insider:Any thoughts on the native ad guidance issued by the U.S. Federal Trade Commission (FTC) late last year?

Powell:At the most basic level, we agree with the FTC's ultimate goal, which is to ensure users are able to distinguish ads from editorial content.