What’s the buzz about native ads?

Jul 30th, 2015

Native ads have been with us for a while now, however, last year they started making headlines as the new ‘thing’ to revolutionise the way we do display advertising

Recent amplified interest in native ads has seen the number of native ad exchanges shoot up, with more and more publishers seeing an opportunity in this format.

BI Intelligence estimates that spend on native advertising will reach $7.9 billion this year and a staggering $21 billion by 2018 in the US market:

native advertising revenue

The market for native ads indeed seems to be flourishing this year. Microsoft announced earlier this month that they will also be joining the trend with Bing Native Ads in beta. So with Microsoft on board, and Yahoo having run the format since early 2014, everybody is wondering just when Google will follow.

What’s the native ads phenomenon all about?

Native advertising is a form of display advertising that automatically matches form and function of the platform on which it is published. The idea behind this is to make the ad coherent with the content of the platform so users perceive the ad as a part of the website. In conjunction with the right targeting methods, native ads are designed to show the users meaningful content that blends with their interests providing a smooth browsing experience. Native advertising has so far established three forms:

  • native style display ads – content appears within a publisher’s display unit
  • native social ads – content published within social feeds
  • content native ads – ad has similar style and content to articles on a publisher’s site

Although the format is designed to be user friendly and less disruptive than traditional display ads, user opinions are divided. Some consumers argue that they find native ads confusing and misleading as it aims to trick them into engaging with ad content. Recent performance studies, however, suggest that the idea is working and successfully outperforming traditional display ads.

A TripleLift brand study published in April 2015 registered 15x greater CTR (click-through-rate) and 281% increase in purchase intent for the tested sample that were exposed to native ads vs. traditional banner ads.

Another study by Yahoo (see graph below) shows a 3.6x greater lift in branded search and 3.9x greater advertiser site viewthrough when using native advertising. Yahoo also however revealed that 60% of users taking part of the study felt positive about the format which indicates there is still a fair share of users not convinced about this new form of advertising.

standard display versus native

What does this mean for your business?

Proponents of native advertising claim that there are benefits for every business vertical. We have, however, found that this format tends to work better for B2C businesses that are aiming to promote and establish their own brand and products. This form of advertising also translates well into mobile so if you have a significant mobile presence, native ads can be worth a try.

Furthermore, with the performance metrics available, native can actually provide some valuable insights about your audience that can aid your overall digital advertising strategy. Native ads can give some insight into:

  • what types of content your audience finds interesting
  • when and how long users are viewing your content
  • what type sites your audience visits
  • what your audience is looking for when viewing your ads
  • who are the users viewing your content

Sounds good? However, before jumping in, we would recommend that you re-evaluate your advertising goals to determine if this is really something you would benefit from instead of just following the most recent marketing fad.

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