Digital marketers are constantly coming up with innovative ways to capture the attention of internet users. As online consumer behavior evolves, so do digital marketing tactics. Native advertising is one of them. In fact, it is one of the most popular (and effective) digital marketing tactics, today. The global market cap for native advertising is expected to reach $402 billion by 2025.

Native ads get more attention from millennials and fetch better click-through rates. But before we get to why native advertising works so well, let us first see what native advertising actually is. 

How Does the FCC Define Native Advertising?

According to the FCC, native advertising is advertising that is designed to blend into its surroundings. It is similar to advertorials in the print world. The idea is to make ads that are as non-intrusive as possible. However, the very nature of native advertising gives marketers an opportunity for deception. And the FTC has rules to prevent that. In certain scenarios, businesses need to disclose that a piece of content is native advertising.

For example, a lot of blogs and news websites suggest additional third-party content to users. You must have seen these carousel posts on a lot of online publications at the end of articles. Brands need to explicitly reveal such content as sponsored to prevent deception. 

Here is a detailed FTC guide to native advertising for businesses

Does Native Advertising Actually Work?

So, the FTC needs businesses to be transparent about native advertising. Essentially, users need to know when they are being advertised to. Doesn’t that defeat the whole point of ads that are designed to blend into their environment? And more importantly, do native ads even work? In one word, yes. 

Related: The One Best Way to Spend Your Ad Dollars Now 

It might sound counterintuitive, given the guidelines set by regulatory authorities worldwide. But there is enough data to suggest that native advertising is one of the most effective forms of digital marketing. Sample this: compared to banner ads, native ads register a higher purchase intent, which means, better conversion rates for businesses. According to the same research report, they are more visually engaging and translate to better brand lift compared to other forms of digital advertising. 

According to a 2017 study, consumers prefer branded content (native advertising) compared to traditional ads. 

Types of Native Advertisements

With emerging technologies, marketers are consistently coming up with innovative native advertising formats. For example, branded Snapchat filters are an example of native advertising. They blend in nicely with other filters on the social media platform while promoting brands’ marketing campaigns. Starling Bank, for instance, increased its brand awareness by engaging millennials with an AR filter on Snapchat. 

According to the Interactive Advertising Bureau, marketers can break down native advertising into six primary categories:

Recommendation Widgets

One of the most common types of native ads, you can (usually) spot them at the end of articles or blog posts. Sometimes, even social media platforms and search engines have these recommendation widgets. Pinterest, for example, has this option for advertisers.

In-Feed Units

These are similar to recommendation widgets. Instead of being placed at the end of a piece, though, they appear in-line with editorial content and blog posts. Popular publishers, such as Mashable and Forbes, rely on this type of native advertising to generate revenue. 

Promoted Listings

Ever noticed sponsored listings on Etsy, Amazon, and other eCommerce platforms? They are designed to look like organic listings, with “sponsored” written in small text, somewhere on the top or bottom corner of the listing. 

Paid Search Units

Google and other search engines rely on native advertising, too, to generate revenue. Those paid search listings you bid for on Google are an example of native advertising. Google ad listings are designed to look exactly like their organic search results. 

Display Ads

Even display ads, when combined with native elements, can be a form of native advertising. For example, a display ad for organic produce on a food blog is a form of native advertising. Popular social media platforms, such as Facebook and Instagram, generate a bulk of their revenue through this kind of native advertising. For display ads to be native ads, they should be contextually relevant to the content they are appearing alongside with. And they should be designed to be as non-intrusive as possible. 

Custom Units

These are native ads that can’t be categorized in any of the five aforementioned types. Branded filters on Snapchat are an example of this type of native advertising. Sponsored playlists on Spotify are another example of custom native advertising. 

What Does Native Advertising Look Like?

Based on the six primary types of native advertising, here are some common examples of native ads that you might come across in your everyday internet usage. 

Native Advertising Examples 

In-Feed Ads

Notice “Brand Contributor” written below the thumbnail on the right. The publisher is also indicating that the content piece is part of Forbes’ “Paid Program”, thus meeting the regulatory guidelines. This is an example of In-Feed native advertising.

Promoted Listings

The first result that pops up for the search term “USB Hub” on Amazon is a sponsored listing. It looks exactly like the organic search results, except, the brand has paid Amazon to be at the top of the page. “Sponsored” showed on the top of the listing tells users that this is paid advertising. However, it blends with the rest of the results, which makes it non-intrusive, and more trustworthy. 

Content Recommendations

ScoopWhoop is a popular Indian publisher that appeals to millennials. It reserves the end of each blog post for suggested content, such as in the screenshot above. Notice “sponsored” written in tiny font to comply with advertising guidelines. For this type of native advertising, it is very important that suggested content is in context to the blog post. Imagine a suggested content piece for vegan recipes appearing below a blog post entitled “5 Lip-Smacking Barbecue Chicken Recipes for your Sundays”. 

Native Video Ads

Native video ads get a little trickier compared to other formats. Sure, you can borrow from any of the common categories and display your video ad. But for native video ads to be really effective, they need to have a stronger pull, compared to a suggested blog post, for instance. It takes more effort to watch a video. You can’t just skim through it. Microsoft’s ad for the improved internet explorer is an outstanding example of native video advertising on YouTube. 

The ad pulls in the viewer with nostalgia, reminiscing about how it was growing up in the ‘90s. It is only towards the end that the ad reveals the improved internet explorer. Even the title of the ad, Child of the 90s, coaxes users with nostalgia (which currently, is an effective strategy that a lot of brands are resorting to).

Native Advertising on Social Media

With Facebook’s Audience Network, brands can create native ads that fit well with their content. Facebook also differentiates between banner ads and native banner ads. The latter lets brands offer a seamless experience to their users. 

Related reading: The Complete Business Guide to Facebook Audience Strategy

Similarly, Instagram lets you boost any post, effectively converting it into a native ad. The visual layout of the app makes native advertising on Instagram really powerful. Twitter has native advertising, too, in 6 different formats. 

Programmatic Native Advertising

Native advertising is great. Given its non-intrusive nature, it becomes a win-win for brands and consumers. But how do brands buy native ads? Before the dawn of artificial intelligence and machine learning, publishers and brands would sit down and negotiate advertising deals. 

Today, negotiations happen in real-time. And it is called programmatic advertising. Brands use a demand side platform (DSP) to calculate the number of impressions they want and how much they are willing to pay for them. Publishers use a supply side platform (SSP) to sell screen space for ads. And all of this happens in real-time. 

Related reading: How to Select the Right DSP Programmatic Ad Agency  

For example, if an ad campaign isn’t working well, a brand can decide to adjust its advertising budget in real-time, thereby saving ad dollars. In fact, with the help of predictive analytics and automation, brands can serve ads to audiences that will be most receptive to them. Programmatic native advertising allows brands to create seamless user experiences, thereby increasing the chances of brand uplift and brand awareness. 

Related reading: Increase Your Leads with Programmatic PPC Advertising 

Hire a Team of Native Advertising Professionals

Grabbing consumers’ attention is getting increasingly difficult on the internet. A spray and pray approach does not work anymore in digital advertising. Unleash the power of native ads with a cohesive 360-degree marketing strategy. Hire native advertising experts to unlock the next phase of your business’ growth.