What Is Native Advertising?

Publift
August 29, 2022
September 22, 2022
What Is Native Advertising?

Native advertising has been catching the attention of both marketers and publishers of late, and for good reason.

Native advertising is a form of advertising where an ad blends seamlessly into a piece of content. Sponsored social media are a classic example of this type of advertising.

Such advertising contrasts with conventional display advertising in which the ad clearly stands out from the rest of the content. For example, an article on fishing for marlin on a deep sea fishing website may be accompanied by banner ads that list popular brands of fishing rods and their prices.

A native ad’s ability to blend in with the main content affords it a trustworthiness that conventional display ads struggle to match. This has made native advertising an increasingly valuable asset to marketers and publishers.

According to a recent survey from web recommendation platform and native advertising specialist Outbrain, 75% of consumers trust the content of native ads. By contrast, only 54% of consumers demonstrate the same trust in conventional ads they encounter in social media posts.

Such a pronounced difference in consumer attitudes towards native ads and their conventional counterparts has made the former particularly appealing to publishers. By providing advertisers the opportunity to promote their products alongside related content, publishers have been able to make their content monetization strategy more lucrative. With the increasing popularity of native ads, there's also a variety of native ad platforms for publishers to choose from. 

But there's more to native ads than just maximizing revenue. Read on to find out what, exactly, native ads are, how they work and the different formats they come in.

Table of contents:

What Is Native Advertising?

What Is a Native Advertising Platform?

How Do Native Ads Work?

Types of Native Advertising

Why Is Native Advertising Important?

Benefits of Native Advertising for Publishers

Benefits of Native Advertising for Marketers

How to Choose the Right Native Platform 

Final Thoughts

What Is Native Advertising?

Native advertising involves placing ads that seamlessly match the form and subject matter of the host content. When properly executed, a native ad can seem less like an ad and more an extension of the content.

This, however, does not mean that the distinction between ad and content is completely erased. Captions for video native ads, for example, typically include the words "recommended by", while other native content is often accompanied by text such as "suggested post", "recommended for you" or "sponsored".

These captions highlight the presence of native ads to the observant consumer. Native advertising’s ability to blend in with the content simply makes them less intrusive. This means that the consumer arguably sees less advertising and more content.

By not risking ad fatigue, as is often the case with traditional display ads, native ads target audiences in a more palatable manner. This is perhaps why the native advertising market is expected to reach a projected value of $400 billion by 2025.

What Is a Native Advertising Platform?

A native advertising platform enables the display of native ads alongside the main body of content in a native, non-intrusive way.

Although there are different types of platforms, all of them are designed to present native ads as seamlessly as possible before their target audience.

Instagram, for instance, incorporates a native advertising platform that displays ads that are similar to posts in its main news feed. Similar native advertising platforms are operated by other social media platforms.

Content recommendation platforms such as Taboola match native ads with the native ad inventory of popular blogs and news outlets.

These platforms often incorporate programmatic native advertising in which advertisers bid in real-time for native ad placements through their demand side platforms (DSPs) while publishers review the bids, also in real-time, through their supply side platforms (SSPs).

Native ad platforms are a crucial element in the native advertising ecosystem, as they not only bring advertisers and publishers together but also enable the large-scale distribution of native ads.

How Do Native Ads Work?

As with other forms of digital advertising, publishers supply that native ad space that advertisers bid on. A match between the two is arrived at using programmatic advertising and real-time bidding (RTB).

Here's an example of native advertising at work. 

John visits a website that publishes articles on backpacking around the world. As John browses the section of the website that focuses on India, the SSP of the website's owner submits an ad request, along with data on John's interests, to interested advertisers running native advertising campaigns.

Through ad exchanges—platforms that connect publishers and advertisers—and their DSPs, advertisers place their bids for the native ad space on the backpacking website. The SSP of the site's owner then evaluates the advertisers' bids, awarding space to one of the advertisers.

This entire process occurs in milliseconds and ends with John seeing an ad for a sponsored piece on a backpacker's positive experience with a certain type of hiking boot.

Types of Native Advertising

Native ads are constantly evolving to meet customer needs. However, there are some formats that are more widely used than others. Here's a list of a few native advertising examples.

Sponsored Articles

Commonly found on news websites, sponsored articles are, at a glance, indistinguishable from the other articles that surround them, making them an ideal native ad in some situations. Here are their features.

Sponsored/Recommended to Readers

Sponsored articles are often positioned beneath or next to the main article on a web page, and are usually accompanied by the words "Sponsored article", "Recommended article" or, if they're grouped with other sponsored articles, "Recommended articles".

Brand-Specific

Sponsored posts provide their target audience with interesting, often practical, information that's also related in some way to the brand that's sponsoring the article. In this sense, they can attract a target audience that extends far beyond the brand's target market.

Text-Focused

Although sponsored content often includes attractive photographs and other images, compared to other native ads it's much more text-focused, and can often be many paragraphs long. Consumers who warm-up to a good read are among its biggest fans.

An example of sponsored content can be found in The New York Times article Why our Future May Depend on Birds, which was sponsored by the shoe company Allbirds. The article focused on the importance of different bird species and how climate change threatens their continued existence.

The article's environmental focus smoothly blended in with both Allbirds' ethos of sustainability and its name.

Social Media Ads

Another common type of native ad can be found on Facebook, Instagram and other popular social media platforms. These ads appear in the news feeds of social platforms, and lend themselves well to the constant stream of posts that fill such feeds.

Their key features include the following:

Paid Posts

An ad on someone's Facebook or Instagram feed is invariably accompanied by a “paid post” button or a “paid post” hashtag.

Brevity

Given the brevity of many social media posts, a native ad in someone's feed will also be relatively succinct. This will help it to blend into its surroundings.

Audiovisual Flexibility

Unlike sponsored articles and other native ads, ads in social feeds can include a variety of audiovisual material. From video footage to single images to collections of images that can be viewed in a scrolling carousel-like fashion, native content in social feeds offers consumers a variety of material.

An example of simple yet effective native audiovisual advertising is Land Rover's Dragon Challenge video. This ad is a six-minute film with suspenseful footage of a Land Rover scaling a long staircase on a mountain in China and is tailor-made for sharing on social media where the native content typically consists of exciting, interesting, or unusual videos shared by users. 

Twitter Hashtags

Another way in which native advertising can blend into everyday conversations is through Twitter hashtags. An extension of social media feed ads, hashtag-based native advertisements are even more malleable to their surroundings, given the ubiquity of hashtags on social media.

Sponsored

Like the ads we've already mentioned, Twitter hashtag-based ads are accompanied by a brief mention of the business behind the ad, often in the form of another hashtag or the business's Twitter username.

Interactive

Depending on the subject matter, hashtag-based ads can encourage audiences to engage with them in their own way, either by adding their comments or forwarding the ad to others.

Visual

Like native ads on other social platforms, Twitter hashtag-based native content lends itself well to visual material, be it still images or native video ads.

Tequila manufacturer Patron Tequila was able to harness the effectiveness of hashtag-based communication when it launched a Twitter ad to promote its brand of Tequila on International Margarita Day.

Using the hashtag #MargaritaOfTheYear, Patron was able to encourage Margarita lovers to vote for the best Margarita recipe of the year.

Why Is Native Advertising Important?

Native ads’ importance lies in their ability to personalize content in line with a consumer’s preferences. By providing valuable content in a non-intrusive way, they offer audiences the opportunity to engage with content on their terms instead of an advertiser's.

This power shift is, arguably, one of the key drivers behind the increasing popularity of such ads, as recent figures illustrate.

According to Statista, native ad spend increased from just over $35 billion in 2018 to more than $52 billion in 2020. Given the value native ads provide to advertisers, publishers, and consumers alike, these figures look set to increase over the coming years.

So why are advertisers shifting towards native advertising in such a big way? Here are just some of the reasons.

Reduced Ad Fatigue

Ad fatigue is when consumers become tired of display ads, eventually ignoring or avoiding them altogether.

Native ads can help advertisers revitalize flagging consumer engagement resulting from ad fatigue by offering content that is both interesting and new, in a context that seems natural and, therefore, acceptable.

Simply put, consumers are less likely to be fatigued by ads if they feel less advertised to.

Cultivation of Trust

Trust is critical to any relationship, and savvy users of native ads know this only too well. Much of the success of native ads can be attributed to their ability to blend quality with relevance.

It's worth noting, for example, that more than 80% of news consumers have claimed that seeing ads within a news environment increases or maintains the trust they have in the advertised brands.

Relationship Building

Once trust has been established, it is much easier for a business to strengthen its relationship with its customers.

Effective native ads help with this by giving customers either what they want or pleasantly surprising them. Every carefully crafted native advertisement that has been strategically positioned within a specific site on a web page is a deposit in the customer relationship account.

Benefits of Native Advertising for Publishers

Programmatic native advertising’s bidding process allows publishers to maximize their revenue from marketers.

Over time, publishers can use this process to maximize the quality of their content, ensuring that sponsored stories, native video ads and other paid advertising marry well with non-ad content.

But there are other, more specific, benefits that publishers can enjoy.

Revenue Analysis

Cost per mille (CPM) measures how much revenue a publisher earns for every 1,000 ad impressions. Native ads can lead to higher CPMs and click-through rates (CTRs).

Audience Segmentation

Digital marketing and advertising are premised on the needs and wants of different audiences. By using native content to carefully curate different parts of a website according to audience characteristics, publishers can give visitors what they want.

User Friendliness

By its nature, native advertising is customer-centric and, therefore, user-friendly. This renders any website that hosts such content attractive; and this, in turn, can only encourage consumers to spend more time on such a site.

Benefits of Native Advertising for Marketers

Native advertising has the following benefits for marketers:

User Engagement

Native advertisements have an average click-through rate (CTR) of 0.20% across desktop and mobile platforms, according to Outbrain, while display ads only have a 0.05% CTR. This means that a customer is four times more likely to engage with a native ad than a conventional display ad. 

High RoI

Increased user engagement results in increased conversion, meaning that marketers generate more revenue for every ad dollar spent. The return on investment (RoI) for native ads thus is better than that for display ads.

Variety of Placement Options

Native ads are versatile, blending seamlessly into a variety of content formats—from lengthy sponsored stories and social media feeds to individual social posts and everything in between.

This variety affords marketers and advertisers the opportunity to find placements that align well with their native advertising campaign goals.

How to Choose the Right Native Platform 

Choosing the right native ad platform can be a little daunting, particularly for those who are new to native content. But with the right pointers, it needn't be so difficult.

Here are three tips for advertisers to keep in mind. As for publishers, there's a variety of ad networks that cater to their specific needs.

Targeting

Depending on how specific their advertising content is, advertisers need to ensure that the platform they choose will reach their audience.

Some platforms, for instance, may offer narrow categories that clearly reflect the purchase intent of consumers, while others may target users of specific technology, such as users of mobile devices.

Then there are platforms that target audiences according to the type of ads that are used to reach them, such as interstitial ads.

Pricing

To maximize the return on ad spend (ROAS), advertisers also need to clarify the pricing model for their native campaign, then find a platform that will offer their pricing model.

Native advertising costs can vary considerably, so it's crucial to identify the best pricing model and then match it with the right platform.

For advertisers pursuing a CPC model, there are a number of CPC-specific platforms to choose from.

Reporting

Advertisers need to consider what KPIs will be used to assess the performance of paid content as well as the availability of customized reports and whether they cover in-feed ads, news feed ads and promoted listings, or only other native content.

Final Thoughts

Native ads are increasingly the medium of choice for many publishers and marketers, thanks to their ability to connect with audiences in a personalized, natural way.

As with other aspects of online advertising, the deft use of native ads requires detailed knowledge of consumer interests and an up-to-date understanding of their ever-changing interests.

Publift helps digital publishers get the most out of the ads on their websites. Publift has helped its clients realize an average 55% increase in ad revenue since 2015, through the use of cutting-edge programmatic advertising technology paired with impartial and ethical guidance.

Contact us today to learn more about how Publift can help boost your ad revenue and grow your business!

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