Updated: Oct 19
by Steve Olenski
Today’s businesses are seeing a shift in how consumers prefer to learn about brands. Click-through rates for banner ads were at 9 percent in 2000; today, they’re less than 1 percent.
As a result, companies have turned to native advertising to promote their brands. So far, it’s proving more successful than traditional online advertising:
People view native ads 53 percent more frequently than traditional ads.
Native advertising can increase brand lift by as much as 82 percent.
Purchase intent is 53 percent higher when consumers click on native ads instead of traditional ads.
Native ads containing rich media can boost conversion by as much as 60 percent.
The native advertising industry will reach $4.6 billion in revenue by 2017.
Native ads are designed to fit so closely with a publication’s content that they appear to be part of a publication. At the same time, a reasonable consumer should be able to distinguish native ads from the publication’s original content. Native ads aren’t just good for brands; they’re also good for publications. Seventy-one percent of publishers report no negative reader response to native ads.
Types of Native Ads
The Interactive Advertising Board puts native advertising options into six distinct categories. Publishers might offer all of some of these ads on their sites:
1. Content Recommendation Engine Widgets
At the end of many articles, readers often encounter widgets with a heading that says “Recommended for You” or “You May Also Like…” These widgets, called content recommendation engines, allow brands to leverage the audiences of major publishers to drive traffic back to their websites. Content recommendation widgets are good for publishers that want to increase their audience or for brands using content marketing for lead generation. The key for advertisers is to develop relationships with the kinds of publishers that can actuallydrive traffic back to advertiser websites.
Revcontent operates a content recommendation engine for a network of publishers that has included NBC News, CBS Local, and Barstool Sports. CEO John Lemp says the key to success is creating real partnership between publishers and brands. “Publishers have to show that they’re committed to helping advertisers meet their goals to be part of Revcontent’s network.”
2. Promoted Listings
Promoted listings are used by e-commerce sites to feature sponsored products first, generally on a category page. In addition to getting brands to the front of the line, promoted listings are getting more cost effective, too. Sellers like eBay no longer charge customers for promoted listings until the listing generates a sale.
3. Paid Search Ads
Paid search ads are like promoted listings except the listings appear at the top of customer search results. They’re used both for search engine marketing and within search results for individual domains.
The terms “promoted listing” and “paid search ad” often overlap depending on the publisher. Foursquare’s promoted listings, for example, put advertisers at the top of a customer’s search results. They also promote businesses based on the searcher’s current location and previous preferences for certain businesses or restaurants.
4. In-Feed Units
In-feed units promote sponsored content within a publication’s natural index of articles. In addition to seeing original content as part of a stream or gallery, readers see sponsored content from advertisers. The content is marked as sponsored, but it blends into the publisher’s native experience.
5. In-Ad With Native Elements
This type of native advertising looks like a standard ad, but it has significant contextual relevancy with the publisher. For example, a food brand might promote its own proprietary recipes on websites that publish user-generated recipes, such as AllRecipes.com, or next to a New York Times article containing seasonal recipes.
6. Custom Ads
The IAB uses the catch-all term “custom ads” for contextual ads that don’t fit a specific format. For instance, if you created a Pandora playlist for workout music, Pandora might serve up ads for sports products or sports drink.