What Is Native Advertising?

The ever-changing nature of online advertising means publishers are constantly looking for new ways to engage their audiences and drive revenue. One such strategy is native advertising.

Native advertising has grown in popularity with both publishers and advertisers, because native ads blend seamlessly with the surrounding content. The sponsored social media post is a great native advertising example.

Audiences, though aware that these are ads, find this type of paid advertisement far less intrusive than traditional display ads.

Display advertising relies on showing ads that stand out from the rest of the content. For example, an article on fishing for marlin on a deep sea fishing website might be accompanied by banner ads that list popular brands of fishing rods and their prices. And yet, audiences have developed banner blindness in response to this type of advertising.

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.

The increasing popularity of native ads has seen a growing number of native ad platforms for publishers to choose from. But there's more to native ads than simple revenue maximization.

Read on to learn more about what native advertising is, how it works, its benefits for online publishers, as well as different native ad formats.

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Table of contents:

• What Is Native Advertising?

• What Are Native Ads

• 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 

• Best Native Advertising Units for Publishers

• Final Thoughts

What Is Native Advertising?

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Native advertising is paid advertising that seamlessly blends with the look and function of the media format it appears in, avoiding disruption to the user experience.

Native advertising examples include promoted search results and sponsored social media posts, which provide value while promoting products or brands. Native ads come in various formats like in-feed ads and sponsored content and advertisers will use programmatic platforms to improve campaign efficiency.

This style of advertising engages users, improves click-through rates (CTRs), and builds brand recognition, offering a more organic and effective approach to advertising.

That’s not to say 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".

Nevertheless, native advertising's ability to blend in with the content simply makes them less intrusive, meaning the consumer feels like they’re seeing fewer ads. By not risking ad fatigue, as is often the case with traditional display ads, native ads use a softer approach for their target audiences.

This is perhaps why native display ad spend in the US alone is projected to grow by 12.5% year on year in 2023 to $98.6 billion.

What Are Native Ads?

Native ads blend seamlessly with the surrounding content, making them appear more like editorial or organic content rather than traditional ads. Native ads come in various formats and placements.

For example, they can be found as recommended content on websites, appear below or beside the main article, or show up as "in-feed" ads within a social media news feed.

One of native advertising’s key benefits is its ability to capture and maintain user attention. By seamlessly blending with the content users are already consuming, native ads can attract more visual engagement and capture interest. They often feature captivating headlines, images, and relevant information that piques user curiosity.

How Do Native Ads Work?

As with other forms of digital advertising, publishers supply the 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 website owner’s supply side platform (SSP) 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 demand-side platforms (DSPs), advertisers place their bids for the backpacking website’s ad space. The site owner’s SSP then evaluates the advertisers' bids, picks a winner and facilitates displaying the creative.

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.

1. 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.

Let’s look at some of 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 content/article" or some variation.

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.

Advertorials

This type of content is somewhere between a long-form text-based ad and an editorial piece. Compared to other native ads, the advertorial’s focus is to completely win consumer buy-in on the publisher’s platform before sending them to the advertiser’s landing page.

A great example of such 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 sophisticated layout and design mean it adheres to the NYT’s quality standards while promoting Allbirds' message of sustainability.

2. 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 flagged with either a “Sponsored” tag or “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 effective native audiovisual advertising is Land Rover's Dragon Challenge video. This ad is a 6 minute film of a Land Rover scaling a long staircase in China and is tailor-made for sharing on social media where native content typically consists of exciting, interesting, or unusual videos shared by users. 

3. 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 ads are even more malleable to their surroundings, given the ubiquity of hashtags on social media.

Sponsored

Similar to 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

Similar to 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 advertising’s importance lies in its ability to line up with a consumer's content preferences.

Providing valuable content in a non-intrusive way also means media outlets can publish native advertising with a certain degree of comfort that it won’t alienate their audience.

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

1. Reduced Ad Fatigue

Ad fatigue is when consumers become tired of display ads, eventually ignoring or avoiding them altogether. In other words, banner blindness.

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.

2. 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.

3. 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.

1. 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).

2. 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.

3. User Friendliness

By its nature, native advertising is customer-centric and, therefore, user-friendly. This means any website that uses such content and can encourage consumers to spend more time there.

Benefits of Native Advertising for Marketers

Here are some of the reasons why marketers and advertisers choose native advertising, which falls under the umbrella of content marketing.

1. 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. 

2. 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.

3. 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 ad placements that align well with their native ad 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.

1. 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 mobile device users.

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

2. 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 cost 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.

3. 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.

Best Native Advertising Units for Publishers

Native advertising has become a popular and effective strategy for publishers to monetize their platforms while maintaining a positive user experience. Here are some of the best native advertising units for publishers.

1. In-feed ad units: 

In-feed ads are a top choice for publishers because they seamlessly blend with the surrounding editorial content, providing a natural and non-disruptive user experience.

2. Sponsored content: 

Sponsored content involves creating valuable and informative content that aligns with the publisher's editorial style. It allows publishers to monetize their platforms without compromising audience trust and interest. Sponsored articles, videos, or infographics enhance user engagement and provide a win-win situation for both publishers and advertisers.

3. Promoted listings: 

Promoted listings offer advertisers a prominent position within the publisher's website or app. They generate additional revenue while enhancing the user experience by featuring products or services at the top of relevant search results or category pages.

4. In-video native ads: 

In-video native ads capitalize on the visual engagement of videos. By seamlessly integrating ads directly into video content, publishers provide a non-intrusive user experience.

5. Native display ads: 

Native display ads resemble traditional display ads but match the look and feel of the publisher's platform. They are less disruptive and more engaging for users. Native display ads offer higher CTRs and increased brand recognition for publishers while reaching target audiences effectively.

6. Native search ads: 

Native search ads appear within the publisher's search results, aligning with the user's search query. They provide a non-intrusive way for advertisers to promote products or services while generating additional revenue for publishers.

7. In-app native ads: 

With the increasing popularity of mobile apps, in-app native ads have become a crucial revenue stream for publishers. These ads blend seamlessly with the app's user interface, whether in-feed, interstitial, or rewarded ad formats.

The best native advertising units for publishers are those that seamlessly blend with the publisher's content, offer a non-disruptive user experience, and maintain the trust and interest of their audience. By leveraging the native advertising units listed above, publishers can attract advertisers, generate revenue, and achieve long-term success.

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.

If you're making more than $2,000 in monthly ad revenue,contact us today to learn more about how Publift can help increase your ad revenue and best optimize the ad space available on your website or app.