You have probably read or at least heard about the article Peak Google, by Ben Thompson. It made a big splash and got a lot of people talking. In summary the article looked at why Google actually has no right to command a presence in display advertising and the future could well lie with immersive content and native ads.
Firstly to define Native Advertising, Ben explains: “I classify any sort of “in-stream” advertising as native advertising. Thus, for a news site, native advertising is advertising in article format; for Twitter, native advertising is a promoted tweet; for Facebook, native advertising is ads in your news feed.” Ben goes on (in reference to Google): “Yes, they’re an ad company, but the key to native advertising on the Internet is the capability of producing immersive content within which to place the ad, such as Facebook’s newsfeed.” Reaching people in an environment when they are consuming content.
We studied contextual ads recently and found that 53% of respondents agreed that if a friend/family member recommended the retailer, they would consider purchasing. 32% of people surveyed would consider purchasing from a new retailer online if an advertisement offered a large discount. This consideration and the online decisions making process has a term, which is ‘The Zero Moment of Truth (ZMOT)’. The idea is about reaching shoppers at the right time, in the right place, and with the right content. Users go through several lines of thinking before making a purchase. It is up to the retailer to understand the process and target them accordingly. When targeting new customers or shoppers, the results show that if the retailer is recommended the customer feels much more confident in committing to a purchase. Social context taps into this recommendation element.
We are already seeing Facebook go from strength to strength, as they recently reported their most profitable quarter in company history, growing ad revenue by 64% YoY to a strong $3.2 billion. Time will tell but we definitely think we are on trajectory for an ‘eclipse’ and agree with a lot of Ben’s points. In summary, “…this is not about the decline of Google. It’s about there being a much broader opportunity than just search advertising.”