Will CPMs improve as native ads replace banner ads?

There seems to be a lot of talk about replacing underperforming banner ads (sample click throughs of .01%) with Native Ads.  The idea is to embed sponsored content within editorial, which sounds like a great idea.  Buzzfeed is leading the charge here and has convinced The Awl to try this as well.

The legacy publishing houses (Hearst, Conde, Time) are doing their best to transform the space themselves, with only a little bit of success as evidenced by eroding revenues due to lower CPMs moving from print to website to mobile and little if any profit from the aggregators (Pulse, Flipboard)

Here are a few examples of older titles partnering with start-ups:

  • Real Simple and Lover.ly have a content and ad sharing deal in the wedding space
  • Esquire and Byliner have an editorial/publishing relationship based surfacing new indie authors
  • Vogue and Moda Operandi on an ecommerce deal that enables users to pre-order fashionable clothes on Vogue Fashion, Features, and More on Vogue.com

There are a number of start-ups focused on optimizing CPMs for unsold inventory (AudienceFuel). Additionally, there are start-ups focused on increasing traffic and user engagement as measured by page views, time on site (Demand Media, Evolve Media, Taboola, SmartLink, WetPaint).

Finally, Chartbeat and Bitly are offering more robust tracking and reporting tools that enable editors, publishers, marketers and advertisers to understand user behavior more completely,

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