The UK’s native advertising market is set to grow massively over the next two years, but confusion remains over its exact definition and where budgets are going to come from within agency departments, according to a new annual study of UK agency and industry attitudes to native advertising commissioned by native advertising platform Adyoulike.

Research revealed that a massive 83 percent of agencies now include native advertising as part of their digital offering, and the remaining 17 percent say they’re planning to do so in the near future. UK agencies currently estimate it will account for an average of 9.2 percent of their total digital display spend in 2014. That figure is further estimated to grow to 14.7 percent in 2015.

The key driver behind this growth is the continued ineffectiveness of display advertising. Furthermore, the agencies surveyed see awareness, brand engagement and consumer education as the top three roles of native advertising campaigns.

But while most UK industry professionals see the potential of native advertising for reaching increasingly sophisticated consumers in premium publisher environments, the study also highlights some of the existing challenges agencies, including how to effectively scale native advertising, sourcing relevant content, the client sign-off process for content and effective measurability.

In addition, six out of 10 agencies (63 percent) were unsure the sector was effectively regulated and only a quarter (25 percent) were convinced that effective regulation currently exists.

According to Francis Turner, managing director of Adyoulike UK: “Native advertising continues to grow in the UK and our in-depth agency study shows that brand marketers are fully engaged with the medium. Native advertising offers engagement, a clear voice and opportunities for brands that traditional display cannot compete with; it also works across platforms—tablet and mobile—that other digital advertising types simply cannot.

“But there are some significant challenges still. The survey highlights that agencies are particularly interested in the issues of scaling native advertising, effective regulation and overcoming some of the perceived issues around content creation.”