Native advertising 101: the good, the bad and the ugly

Much like its cousin display advertising, native advertising is a term that can mystify marketers. It’s easily confused with display and content marketing, embodying properties of both without truly being either.

Native advertising is designed to authentically blend in with its surroundings, be it your Twitter feed or The New York Times homepage. It gets murky because native advertising can be considered content but what really separates the two is money; native is essentially pay-to-play.

In order for you to understand native properly, we’ve taken a deep dive into it to discuss what works and what doesn’t. While it definitely has its advantages, it also has its downside.

The good

They’re effective

According to Mobile Marketing Association research from August, mobile native ads perform 10x better, and earn 3x as much time and attention than their display counterparts. Consumers also prefer the mobile native ads, which earned 23 percent higher ad quality scores than their mobile display ads.

Native ads still perform better on mobile than they do desktop, in part because mobile devices are just inherently better suited for the format. The screens are too small for the kind of multitasking we do on desktop – I currently have 26 windows open in Chrome, as well my email, Spotify and the Word doc where I am writing this – so mobile native ads just capture more attention.

yahoo-autos-nativeads

But still, a Business Insider Intelligence report from earlier this year found that desktop native ads average a click-through rate (CTR) of 0.15 percent. According to Google, display ads average a CTR of 0.06 percent.

They’re… there

Native ads perform better on mobile devices in part because they complement the format better – that hits the nail on the head. They complement the format better by making them un-ignorable.

People are so accustomed to being inundated by banner ads that they don’t even register. “Banner blindness” merited a ClickZ headline nearly a decade ago and it hasn’t gotten any better since, with more digital distractions than ever. Much more recent research by Infolinks found that 86 percent of consumers don’t notice display ads.

By contrast, you can’t really ignore native ads. That’s part of the deal. By seamlessly integrating advertising into the content, it’s integrated into the content. Consumers’ eyes are already there. And the fact that they’re designed to blend makes them feel more like content. This decreases the visceral “Ugh, advertising!” reaction that has consumers downloading ad blockers en masse. Oh, and native ads are largely immune to ad blockers.

The bad

They’re sometimes perceived as sneaky

Native ads are more effective when it comes to getting clicks, but what if people didn’t know they were clicking on an ad in the first place? Native advertising can also be content marketing, and from this standpoint, the two can potentially bleed together.

According to June research by the Reuters Institute for the Study of Journalism, 43 percent of U.S. news site readers have felt disappointed or deceived after reading content they didn’t realize was sponsored. Similarly, consumer insights platform CivicScience surveyed more than 2,000 consumers and found that 61 percent think sponsored content hurts a publication’s credibility.

deception-nativeads

Though native ads should be labeled as such, they still blend in, which is a double-edged sword. People may not have the same visceral anti-advertising reaction, but unknowingly clicking on an ad will surely invoke one. And losing someone’s trust is much more harmful than never having had it in the first place.

They’re pricey

As native advertising has proven to be an effective marketing tactic, it’s exploded in popularity. In May, Business Insider Intelligence estimated that between native advertising spend would be up to $10.7 billion by the end of the year, up from $4.7 billion in 2013. By 2018, that number is expected to swell to more than $21 billion.

Per the rules of supply and demand, native advertising is also really expensive. The average cost per mille (CPM) for a display ad is $2.80 and $3 when it’s a video. Instagram charges non-profits $4.17 and retail brands, $6.58. The social image platform is lauded for doing native ads exceptionally well, on top of having a young, engaged audience. So while you get what you pay for, it is more expensive than other platforms. Granted Instagram is owned by the largest social network on the planet. But native advertising is a costly tactic anywhere, which isn’t likely to change anytime soon.

The ugly (and the not so ugly)

The bad

Price is only a downside of native advertising from a marketer’s perspective. Consumers neither know nor care how much they cost, and are only concerned with their contribution to the user experience.

mashable-purina

From Mashable, this is the most popular article from a slideshow of pet articles called Tails & Rails. The series was sponsored by Purina, though it doesn’t say so anywhere.

Mashable labels its sponsored content as such, but only for a limited period of time, after which it just seems like any other editorial. However, if you scroll to the bottom, you’ll see that the article is still tagged “Purina.”

This strategy is deceptive to readers, and risks losing the trust of its audience. Luckily though, the Federal Trade Commission (FTC) is beginning to cut down on this type of publisher behavior. In June of this year, the FTC said that it will be holding all advertorial content creators liable for misleading native material. Having a “Sponsored” label will no longer be enough and the advertiser/publisher will need to be clearer in its disclosures.

The good

Good advertising prompts people to click and interact – because they chose to, not because they were tricked into it. They should blend into the content feed enough so as not to be disruptive, but they shouldn’t blend in so well that the “Sponsored” is easy to miss.

dasani-instagram

Since I highlighted Instagram as the paragon of native ads, I may as well look to the photo-sharing platform for an example of a good one. This post by Dasani doesn’t look out of place in my feed – none of the sponsored posts I saw did; Instagram is very strict about that – and it’s also both clearly branded and marked “Sponsored.” It also takes the “less is more” approach, which pretty much everyone agrees is better than trying to cram too much stuff in there.

I chose to use Dasani as an example precisely because it’s not a powerhouse. The water brand is owned by Coca-Cola, which is so huge that it has a built-in audience on pretty much any platform. Dasani’s Instagram posts rarely get more than 65 or so likes; this one got nearly 500.

I think the Dasani ad is good because it’s attractive, conformist and most importantly, transparent.

Homepage image via LolSnaps.com

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