What Is Native Advertising? Definition, Components, Benchmarks, & Best Practices with Examples


Native advertising is defined as a form of paid advertising where the advertisements adapt to the form (user interface) and function (user experience) of the environment/platform on which they appear.

According to eMarketer, the native ad spends in the US alone will climb up to $52.75 billion by 2020. As native advertising promises to be an indispensable part of the digital advertising strategy, read on to understand the concept of native advertising, its channels, native advertising benchmarks, and best practices.

Table of Contents

What Is Native Advertising?
Why Native Advertising?
Types of Native Ads
Components of Native Advertising
Native Advertising vs. Contextual Advertising
Native Advertising Benchmarks
Native Advertising Best Practices

What Is Native Advertising?

When browsing publication websites or social media platforms, you might have come across posts with titles such as Sponsored Posts, Promoted Stories, or Recommended for You. You’re redirected to a third-party website when you click on these posts. This is an example of native advertising.

Native advertising camouflages into the media format on the platform it is placed on and allows brands to deliver content in a non-salesy way. So, unlike banner ads, native ads look like part of the interface and don’t interrupt the UX.

Although one could argue about the misleading nature of native advertisements, the Federal Trade Commission (FTC) has enforced the necessary guidelines to prevent businesses from employing shoddy advertising tactics.

Why Native Advertising?

Traditional display advertisingOpens a new window is losing its effectiveness as users get immune to them. Banner blindness and advertising fatigue are real, and advertisers have a challenge tackling them.

Out of the need to accommodate the changing user behavior, native advertising came into existence. Rather than showing one more banner ad that might disrupt the UX, native advertising shows ads that look less like ads.

Brands and publishers prefer native advertising for the following reasons:

  1. Native ads were seen 53% more than display ads
  2. Since native ads gel well within the ad container (websites/platforms where they appear), they are less disruptive, and people are less likely to ignore them
  3. Two-thirds of original digital video (ODV) advertisers have explored native advertising

Learn More: What Is Owned Media? Definition, Process, Best Practices, and ExamplesOpens a new window

Types of Native Ads

Representation of the Types of Native Ads

Earlier, the Interactive Advertising Bureau (IAB) had identified six core types/channels of native ads, but in their latest 2019 playbook, they’ve condensed them into three types viz:

  1. In-Feed/In-Content Native Ads
  2. Content Recommendation Ads
  3. Branded/Native Content

Any ad that can’t be classified into one of these types is a custom ad.

In this section, we’ll expand on these native advertising channels and look at the eight types of ads along with an example for each.

1. In-feed/In-content Native Ads

In-feed and in-content native ads mimic the design of the website where they appear. Although in-feed and in-content native ads sound similar, there’s a slight difference between them.

In-content ads appear exclusively on article pages between paragraphs or below the article, whereas in-feed ads can appear on the homepage, article pages, and content feeds as well. These ads typically appear on publication websites/apps such as Forbes, Entrepreneur, etc

An example of an in-feed ad

2. In-feed Product Ads

Also known as promoted listings, in-feed product ads appear primarily on e-commerce websites. These ads allow sellers to promote their products relevant to the search query without disrupting the shopping experience. These ads appear on category, product, or search result pages.

Here’s an example of a promoted listing on Amazon:

An example of Ads on Amazon – Sponsored by Gallup to distinguish them from organic results

Learn More: What Is Advertising Technology (Adtech)? Definition, Ecosystem, Programmatic, & TrendsOpens a new window

3. In-feed Social Media Ads

It’s impossible to log in to social media sites such as Facebook, Twitter, LinkedIn, or Instagram and not find posts labeled Sponsored. Brands use social media native ads due to their highly sophisticated targeting methods to reach the target audience. These ads appear in the news feed and stories.

Social media native ads can take the form of visual formats such as images, videos, etc.

An example of a Social Media Native Ad on Facebook.

4. Search Ads

Native search ads are commonly referred to as search engine marketing (SEM). Paid search units appear at the top and bottom of the search engine result pages (SERPs). Similar to in-feed product ads, when a user types in a query, the search engine returns both – organic and paid results.

An example of paid search native ads for the keyword – native advertising solutions

Learn More: What Is Programmatic Advertising? Definition, Types, Channel, and AdvantagesOpens a new window

5. Content Recommendation Ads

Content recommendation ads are also known as content discovery ads, sponsored content ads, or content recommendation widgets. These ads are usually placed below the content and listed under titles such as Sponsored Stories, Recommended for You, etc.

The difference between in-stream and recommendation widgets is that the latter may not adapt to the function of the host website.

6. Branded Content

Branded, sponsored, or native content is the non-pushy version of an infomercial. They can be considered modern advertorials. Publishers mention the paid nature of the content when publishing native content.

Forbes allows brands to promote their content under the BrandVoice program.

Learn More: What Is a Demand-Side Platform (DSP)? Key Features, Architecture, and ExamplesOpens a new window

7. In-ad (IAB Standard) with Native Element Units

These ads are pretty much like any other ads, but they are contextually relevant to the publisher’s content. For example, a food blog would publish ads by brands in the food industry.

Image Source: FunmobilityOpens a new window
An Example of an In-Ad With Native Element Units Ad

8. Mobile Native Ads

Native advertising for desktop and mobile devices works the same way. However, the availability of mobile apps gives advertisers a few more avenues to spread their word. Along with in-app ads, here are two more mobile native advertising examples:

In-map native ads promote businesses in the vicinity

In-game ads: In-game native ads show rewarded videos to players. As users earn reward points after watching the video, these ads generate massive engagement.

Image Source: Mobile Marketing AssociationOpens a new window

An example of an in-game native ad

Learn More: What Is a Supply-Side Platform (SSP)? Definition, Features, Companies, and ExamplesOpens a new window

Components of Native Advertising

Representation of the Components of Native Advertising

A digital ad consists of the following elements:

  1. Ad creative (image, video, etc.)
  2. Headline
  3. Body copy
  4. Landing page URL
  5. Branding (name, colors, logo, etc.)

As native ads take the form and function of their container, along with these five elements, as laid out by the IAB, native ads also have the following four essential components:

1. Design

The design must ensure the native ad looks like a part of the website, fits within the overall interface, and doesn’t stand out from the rest of the content.

2. Location

The ad placement on the website is crucial. Is it positioned as a part of in-feed content ads or placed in the content recommendation widget, or is it in a dedicated ad slot?

3. Ad Behavior

When a user clicks on the ad, are they taken to a different page on the website or to a third-party website altogether?

4. Disclosur

How prominently does the ad mention its nature? Has the publisher disclosed that this is an ad?

You can evaluate the different types of native advertising channels based on these four criteria.

Learn More: What Is CPM (Cost Per Mille, Cost Per Thousand Impressions)?Opens a new window

Native Advertising vs. Contextual Advertising

Are native and contextual advertising the same?

In short, no.

Although native ads are considered to be an evolution of contextual advertising, they are not the same.

Contextual advertising is driven by website content and keywords, i.e., the ads displayed on the publisher website are highly relevant to the content on the site. If you have used Google AdSense or Media.net on your website, you might know that the ads are relevant to your website content.

Native ads, on the other hand, are aesthetically relevant to the website. Except for the in-ad with native element units, the native ads may or may not be contextually relevant to the platform they’re placed on.

Native Advertising Benchmarks

If you are planning to get started with native advertising, here are some benchmarks to give a perspective on the results you can expect.

According to IAB Europe, native ads can receive a CTR up to 0.3%, whereas eMarketer found it to be 0.8%. There’s a vast difference between the results published by eMarketer and IAB Europe due to the variations in data collected, but it is clear that native advertising is far more effective than other forms of display advertising.

Below is the industry-wise segregation of the CTR for native ads:

Source: AppNexusOpens a new window

Industry-Wise Segregation of the CTR for Native Advertising

Learn More: What Is Cost Per Click (CPC)? Definition, Calculation, Advantages & ExamplesOpens a new window

Native Advertising Best Practices

Representation of the Native Advertising Best Practices

For a successful native ad campaign, creating compelling ad copy and creatives with actionable call-to-actions (CTAs), and a clear offer are prerequisites. Along with these, here are five best practices for native advertising success:

1. Don’t Sacrifice Platform UX

While most brands get their native ads right from the UI perspective, many of them struggle with providing a good UX with their advertisements.

The easiest way to nail your native ad campaigns from the UX standpoint is by not throwing curveballs. Instead, focus on improving the UI and placing ads thoughtfully. When a user is acquainted with a website/platform/app, they know what to expect when scrolling through a page.

When you place ads haphazardly, you are essentially interrupting the flow by placing an ad out of nowhere. Clutter disrupts UX. The ads should strive for clarity and blend well with the website.

2. Harness the Power of Retargeting

Retargeting has been an effective targeting method in an advertiser’s arsenal. Once the user is aware of your brand, you can gradually convert them into a qualified prospect using remarketing campaigns.

While explaining how retargeting can drive performance through native, Frank Maguire (Head of Market Development, Sharethrough) says,

“If a consumer fell short of completing a purchase because of some hurdle, such as needing more education about a product or service, then native provides an opportunity to inform through content. This can include an article on the brand’s site, or an independent consumer review from a third-party – really, anything a brand has access to that brings the product to better light.”

3. Prioritize Mobile

Adopt a mobile-first approach when working on your native advertising efforts. Fast-clicks, edge-clicks are common among smartphone users. Although ad platforms such as Google have introduced measures for accidental click prevention, it helps to follow best practices for mobile UX, such as designing ads that are easily readable and clickable and optimizing the load time of your landing page.

Farshad Fardad (CEO, Causal IQ) has shared the following three tips to boost native mobile ad campaigns:

  1. Think about how your audience uses their mobile devices
  2. Consider the type of UX and emotions you want consumers to associate with your brand
  3. Identify branding and direct response metrics and optimize campaigns toward achieving them

4. Strive for Relevancy

You can make native ads highly relevant in the following ways:

  1. Contextual Ads: You can target publications in your niche/domain to run contextual ads
  2. Audience Segments: Your audience has different characteristics, and one ad can’t address all their pain points. You can segment your audience and target native ads based on their location, demographics, product usage, and other preferences.
  3. Device: People use desktops and smartphones for different purposes, and their behavior differs on these devices. For example, smartphone campaigns are cheaper, but they don’t convert well.
    It helps to create separate campaigns for smartphones and desktop targeting different stages of the buyer’s journey.

5. Create Content That Helps

If you are running in-feed, branded, or content discover ads, the content you create is the backbone of the campaign.

It’s not enough to create an enticing ad copy and creative. If you want to see an ad campaign that converts, create informative, valuable content.

As the in-feed or content discovery ads are targeted towards the top-of-the-funnel audience, create content that helps them solve their core problems. For branded content, you can subtly place your offerings in the articles. You can talk about the Achilles heel of the audience and mention how the product can help them solve it without asking them to buy it.

Sharing content is the quickest way to build trust, and capitalizing on it will quickly help you get there.

Parting Words

Despite the potential of native advertising, it is not bulletproof yet. The native advertising industry is equally riddled with the challenges faced by the digital ad industry, such as the rampant ad frauds. But don’t let this deter you from experimenting with native ads.

To get started with native ads, determine what you’d like to achieve through your campaigns, create audience segments, create content for each segment across their respective buyer’s journeys, set up your campaigns on a native advertising platform(s). Once your campaign is live, keep tweaking it until you get favorable results.