Native Advertising

What Is Native Advertising?

Native advertising is the concept of creating ads that are so cohesive with the page content, assimilated into the design, and consistent with the platform behavior that the viewer feels the ad belongs there. Promoted search results and sponsored social media posts are popular examples of native ads. Both formats provide the same kind of value to users as the organic search results and user-generated social media posts. As consumers become more resistant to traditional forms of advertising, including display ads and banner ads, Fortune 500 brands and consumer startups alike are allocating bigger budgets and more ad spend towards content marketing and non-disruptive ad formats. The global market for native ads is expected to reach over $402B in annual revenue by 2025.

How do Native Ads Work?

Native ads, a tactic that supports performance marketing, work in terms of supply and demand. On the supply side are publishers, with an audience and reach, looking to monetize their sites. On the demand side are advertisers looking to reach an audience and hit goals around awareness, sales, or lead generation. When a user visits a website with ad space, a publisher’s SSP sends a bid request to a DSP which sends back an advertiser’s bid and metadata metrics. The advertiser with the winning bid has their ad shown to the user.

Types of Native Ads

1. In-Feed Units
In-feed native advertising units are similar to the scenario we outlined above. If you’re seeing sponsored posts appear in your social media feeds or on a publisher’s site (e.g. Forbes, Mashable), those are in-feed units. They’re paid placements that appear directly in-line with other articles, posts, or editorial content.

2. Paid Search Units
Native advertising is also a popular advertising method for search engines. Those top-of-the-page advertising placements you’re bidding on? Technically, they’re native ad placements as those top paid search results are made to look like the organic search results.

3. Recommendation Widgets
Another spot where you’ll find native ads on publisher sites, social media, and even search engine results pages, is in recommendation widgets. You’ll often see these ads off to the side of a web page, or even at the end of an article, to recommend additional content you might like.

4. Promoted Listings
If you have an online shopping habit (like many of us), you see promoted listings regularly. To give you an example, when searching for new marketing books, several sponsored listings appear on Amazon.com. However, while those publishers paid for those media placements, they’re made to look just like the organic listings.

5. Display Ad With Native Elements
This type of native advertising looks just like any other ad you might see online. You may even see them in an ad container or banner. What makes them native, however, is that they’re contextually relevant to the site they appear on and the content they appear next to.

6. Custom
Given the speed of technological change and the potential for publisher partnerships, the IAB’s last type of native advertising leaves the door open for a range of possibilities. Creating a new Snapchat filter is an example of a custom native ad. The filter, while a form of paid media, fits within the app’s user interface alongside Snapchat’s other filters.

Disadvantages of Native Advertising

1. Measure
Measuring the performance and sustainability (with higher renewal rates) of native campaigns is one of the most difficult challenges to overcome for advertisers. Without unified standards in this area, it’s especially hard to gauge metrics, such as return on investment (ROI), impact, and effectiveness.

2. Time and Labor
A great story and design requires both time and talent to produce, neither being areas that advertisers and content creators should cut corners on. The actual process of crafting a native ad or campaign is a costly, multistep process, involving a lot of collaboration and rounds of review, done over a long period of time.

3. Deception
Audiences don’t want to be disrupted by ads, but they also don’t want to be duped into believing that an advertisement is anything other than what it is. Consumers should only be exposed to online advertisements that are fair, clear, and engaging. Unfortunately, native advertising has the potential to be too discrete.

Advantages of Native Advertising

1. Custom content (branded native and branded content) is more trustworthy than traditional advertising
According to a Time Inc. study, 2 in 3 GenZ, Millennials, and GenX consumers trust branded content more than traditional advertising. As a group of more visually-inclined individuals, GenZ is open to engaging with custom content because, compared with traditional ads, it’s more entertaining, thought-provoking, and leaves a lasting impression.

2. Interesting content is engaged with more
In a consumer’s eyes, ”interesting” is synonymous with “relevant.” According to a Reuters survey, 75% of consumers say that, if content peaks their interest, then they will engage with it. It doesn’t matter if the content is branded or not. But, there are additional steps in building a branded content campaign that can make it even more successful: understanding the audience, knowing how, when, where, and why a piece of content should be placed, creating an emotional connection with the consumer and aligning the content with their personality, personalizing the content, and employing more engaging formats like videos and infographics.

3. Native display ads receive a higher click-through-rate (CTR) than typical display ads
In fact, the CTR is 8.8 times higher with native display ads, according to an AppNexus whitepaper. Native ads have performed particularly well for advertisers in the pets, food and drink, and family and parenting brand categories

4. Native advertising drives Millennials to make purchases
A Collective Bias survey discovered that 1/3 of Millennials say that they’ve purchased something as a result of a sponsored post. Surprisingly, consumers don’t immediately dismiss these posts. Almost 37% agreed that useful and high-quality posts negate the content’s branded nature.