Ecommerce

Native Advertising: A Definitive Overview

By Tinuiti Team

Dec 09 2013

Native Advertising: What is It and Why Should We Care?

Native advertising is, as of late, kind of a big a deal. It’s been an industry buzzword for the last couple of months as big time publishers like Buzzfeed, Twitter, Business Insider, and Youtube have started to adopt and consistently serve native ads to their audiences.

It’s becoming more clear now that native advertising is the next big thing. Perhaps more accurately, it’s the current big thing going on in enterprise-level digital advertising.

Be sure to check out future installments to our native advertising series, including:

First, let’s dive into some native advertising basics.

Native Advertising Definition

The official definition of native advertising has been somewhat of a debate, but simply put, native advertising is advertising that delivers relevant content in a familiar context for the user. The bottom line is to optimize the user-experience when serving ads. Good native advertising is:

Delivered to the user in the form of content
Not disruptive to the user experience on-site
Relevant to the user, meaning your message somewhat resonates with your audience (ex. car washing tips for an audience of car junkies)

And native advertising is NOT:

Traditional banner or display ads
Automatic…yet. It aims to be relevant to the user, whereas display ads can be shown to just about anyone. The advent of real-time bidding (RTB) may change this

Solve Media’s native advertising definition is “a specific mode of monetization that aims to augment user experience by providing value through relevant content delivered in-stream.” Native ads mesh into the experience, making it feel like natural content. Two such familiar examples are sponsored tweets on Twitter or sponsored posts on Facebook.

Native advertising has gone under a lot of fire for compromising the relationship between the audience and the publisher. Users don’t want to be served paid-for propaganda in places they consider “unbiased” or “private” (in the most liberal sense of the word).

However, good in-stream ads are relevant and subtle (yet monetized). They fit seamlessly into your browsing experience so that it felt like you found it, not the other way around. That’s native advertising at its core.

A Native Advertising Example

This article seems like a typical list you’d see on BuzzFeed – funny, informative, and a bit trivial. However, if you look closely right under the description, you’ll see what’s different – Hidden Valley Ranch BuzzFeed Partner. This is an example of native advertising content on BuzzFeed sponsored directly by Hidden Valley Ranch.

native-advertising-buzzfeed-example

You might have seen this article on the BuzzFeed homepage or within the food category and clicked through because it had the slightest relevance. And so while you’re scrolling through to discover new foods, you’re very subtly being served product placements. That’s essentially what native advertising is about: creating the perception that content is discovered or found by the user (vs. the user perceiving that they’re being “targeted.”

Why All the Buzz with Native Advertising?

You’re probably all too familiar with traditional banner ads. The truth of the matter is that they don’t perform all that well for most advertisers. Frequent web browsers and shoppers tend to develop a serious, often-permanent disorder called “banner blindness,” where banners are subconsciously avoided or ignored entirely. Banner ads tend to fail for a few different reasons:

They’re not engaging. Users don’t really care for ads displaying a few products or some promotional offers. The web is over-saturated with banner ads.
They can be difficult to target. Even though you can target ads to a customer based on their browsing history, it’s almost impossible to be sure whether or not your ad is relevant to them (which can also makes your ad spend costly and inefficient).
Lastly, they’re disruptive. Users don’t want to see product ads everywhere on the page – on the right sidebar, on the top navigation, in the middle of an article they were reading.

Enter native advertising. Native ads work because they tap into the power of content marketing by serving relevant content to users who are ready and eager to consume. While there is still value in display advertising, it’s not as effective at reaching a more relevant audience. According to Solve Media, 99.8% of banner ads are ignored and the clickthrough rate has decreased from 9% in 2000 to just .2% in 2012. The benchmark is becoming lower and lower. Users are becoming immune to it.

One of the biggest markets for native advertising is social media. Social networks such as Facebook, Twitter, Instagram, and Pinterest have grown tremendously in a few short years, and they provide a portion of the built-in audience for native ads. According to Business Insider, social networks are responsible for at least 17% of all the time consumers spend on mobile. One sponsored post can reach millions of user in seconds, which is why native advertising in social media is so powerful and potent.

Native Advertising Drawbacks

Native ads aren’t for everyone, however. The biggest drawback is cost. Since native advertising engages users so much more than traditional display ads, they command a much higher price tag. Click through rates are through the roof, especially compared to banner ads where rates are usually very low at best. However, if you compute it from a cost per impression standpoint, native advertising is much more effective. The return on investment is much greater than that of most other types of digital advertising.

Another drawback is the lack of data. Since native advertising is fairly new, there aren’t any set industry standards or benchmarks. How do you know if your native ad is doing well relevant to other native ads? It’s hard to make an educated judgment at this point without jumping to conclusions but time will tell as more data becomes available.

As for most digital trends, it remains to be seen whether users will continue to engage with this type of advertising. However, if preliminary results are any indication, native advertising is here to stay.

Stay tuned for more articles in our native advertising series, including: