Native Advertising: What It Is, How It Works, Formats, Benefits & Strategy

Native advertising addresses the challenge faced by most consumers today, who are tired of seeing ads everywhere they go online and often take measures like installing ad blockers, closing ads immediately, or simply ignoring them.

Native ads are a form of advertising that matches the format, tone, and feel of the platform where they appear. As such, these ads are looked upon more favorably by consumers, leading to an increasing adoption across many industries today. This allows it to deliver higher engagement than most ads and make the ads more credible in the eyes of consumers.

Some of the benefits of native advertising include:

• it is less intrusive
• better user engagement
• boosts brand credibility

Running a native ad campaign is easy and platforms like Blockchain-Ads, Taboola, and Outbrain provide the tools to make it happen. These platforms give you a clear image of your audience, provide guidance on the right ad formats, and allow you to monitor and optimize your ad campaign

If you’re looking to improve the awareness of your brand without resorting to interruptive ads, this is the advertising format for you. This article will tell you how native ads work, their benefits, and the best strategy to use them.

What Is Native Advertising?

Native advertising is a type of paid advertising where the ads match the format, tone, and placement of the media where they appear. Unlike standard ads, this native content doesn’t disrupt a user’s immersion in a page. That’s because it fits “natively” wherever it appears to the point where most consumers would have difficulty identifying it. So, you can say that it provides its promotional content without standing out, unlike display ads.

Native advertising goes by many different names depending on the platform and format. Here are the most common terms you'll encounter:

• Sponsored content/Partner content - Collaborative promotional material that matches editorial style
• Sponsored posts/Sponsored articles - Social media and website content that subtly promotes brands
• Branded journalism - In-depth storytelling that resembles editorial content
• Promoted listings - Native ads integrated within search results
• In-feed ads - Advertisements placed naturally within social media feeds
• Sponsored videos - Video advertising that blends with organic content

Recognizing these terms helps you identify native advertising and understand how brands create seamless, non-disruptive ad experiences.

Real-Life Native Ad Examples

One great native advertising example is the Kraft Heinz ads that appeared on the BuzzFeed network. First, BuzzFeed incorporated some Kraft Heinz products into their Tasty videos while showing clearly that each video was sponsored by Kraft Heinz.

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They also produced food listicles in the usual BuzzFeed style with the usual humor while highlighting the Kraft Heinz ingredients within them. In each case, BuzzFeed produced their usual entertaining content, provided value to consumers, and still subtly promoted Kraft Heinz.

How Does Native Advertising Work?

The way that native ads work is quite simple, and it follows the sequence below.

• User visit
• Auction
• Ad display
• Engagement
• Conversion

The image further explains the relationship between all components of the native advertising cycle.

First, users visit an app or website that serves a native ad, and a real-time auction is triggered in the background via programmatic advertising. The auction involves the publishers' SSP (Supply Side Platform) sending bid requests to the many advertisers bidding via DSPs (Demand Side Platforms). This is to choose whose ads will be shown to the visitor. The highest bidder wins and gets their ad displayed in a way that matches the format of that platform.

Since the ad blends into the other content and matches the interest of the visitor, their ad resistance is reduced. As such, the user will be more likely to click the ad, and the relevant engagement metrics will track their movement. After a few interactions with this ad (on multiple platforms if necessary), conversion will take place.

What Makes Native Ads Effective

Native ads are very effective today because they can produce a high CTR (Click Through Rate). This is because they’re designed to blend into their environment, leading to reduced ad resistance from users and a higher time on page. A high CTR also makes this form of advertising cost-efficient.

Due to the precise targeting behind these sponsored ads, it usually aligns with the interests of the consumers. As such, consumers are more willing to engage with it. The ad placement of native ads within trusted content environments, like the Kraft Heinz advertising within BuzzFeed content, makes users more willing to engage with it.

How does Programmatic Advertising Benefit Native Ads?

Programmatic advertising improves the efficiency of native advertising through real-time data optimization and data-driven targeting. With real-time templating, this ad style matches the look, function, and feel of the surrounding media, allowing for an uninterrupted user experience. Metadata bidding only delegates ad space to display ads that meet the requirements of page-level metadata like keywords, topic, and page category.

Granular targeting makes the marketing efforts super precise as it targets audiences based on demographics, behavioral data, and contextual data. The effects of granular targeting also extend to the increased ROI from the ad. The real-time bidding that goes on between SSPs and DSPs also ensure that only the best ads get displayed at a specific time. As all programmatic ads are data-driven, advertisers will be able to optimize their advertising campaigns based on performance signals and A/B testing.

Core Types of Native Ads

Native ads exist in many formats, but the main ones include:

• In-feed ads
• Search ads and promoted listings
• Recommendation widgets
• Native video ads
• Image-based ads
• Sponsored articles and Editorial content

All the native ad formats have their best use case. So each option is chosen based on the audience, the campaign goal in mind, and the stage of the marketing funnel.

In-Feed Ads

This is a native ad format that appears within the organic content feed of a web page or an app. Although they look like the usual organic posts or social media feed of that platform, they’re just a promotion. Some examples of this are Facebook sponsored posts or LinkedIn sponsored content.

Search Ads & Promoted Listings

These are ads that appear among search engine results and are designed to look like organic search results. They can also appear among e-commerce listings on sites like Amazon. Search and promoted listings usually come with a subtle labeling like “Sponsored” to show that they’re ads.

Recommendation Widgets

This is the native ad format you meet when you get to the end of an article. It shows up as “Recommended for you” or “You might also like.”

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It is usually delivered by platforms like Blockchain-Ads, Outbrain, and Taboola.

Native Video Ads

These are auto-play or click-to-watch videos that show up while you’re on the net. They integrate well into the content you’re browsing about and are usually related to it. Native video advertising work can be displayed according to a consumer’s stage of awareness of a product or their conversion stage.

The first videos could introduce the brand to the target audience, and the second set of videos will show how the brand solves problems. For the third set of videos, consumers will be pushed to take action through making purchases or signing up for a service.

Image-Based Ads

These are native marketing that appear as images on blogs, social media platforms, and mobile apps. They blend well with the platform’s design and aesthetic, making them feel like a natural part of the content.

Sponsored Articles & Editorial Content

Creating content like sponsored posts on social media, sponsored videos, or native content on a platform also counts as native marketing. Unlike regular sponsored articles, native ad placements are meant to mimic the tone and label of the regular content on that platform. This is something that the Blockchain-Ads PR team is built to handle.

Take the New York Times editorial on Orange is the New Black as an example. The article looks just like regular NYT content, with the same amount of value being provided to customers. However, below it, readers will see the sponsored labeling there, showing its true form. This is a good way to spot this type of ad, as labeling native advertising is a Federal Trade Commission (FTC) regulation.

Benefits of Native Advertising

Some of the visible benefits of native marketing include:

Native marketing offers considerable benefits in user experience and adds to the credbility of the brand's message, like the Kraft Heinz marketing on the BuzzFeed network. There is so much that brands stand to gain from this ad format, and they're discussed below.

• Better user experience
• Higher engagement & click-through
• Boost in brand credibility
• Multi-channel flexibility

Better User Experience

Internet users today are very perceptive to ads that interrupt that regular browsing experience. As such, paid ads that don’t feel like a promotion would be looked upon more favorably. The fact that such ads also blend with the background preserves the user experience on that platform.

Higher Engagement & Click-Through

The widespread influx of ads on the internet today has trained internet users to ignore such marketing efforts and scroll past them. A native ad is a good change of pace, as it mirrors the tone of the surrounding content. It offers value, not just a sales pitch. As such, it can command the user’s attention for some time, enough for the paid media to be remembered.

Boost in Brand Credibility

When native ads appear in a trustworthy environment (like in the NYT or the Guardian), they look more credible to the consumers. Also, the fact that this type of digital advertising creates value and educates makes it more trustworthy than those that just try to sell.

Multi-Channel Flexibility

Native ads are super flexible and can be displayed on blogs, social media, web pages, mobile apps, and other online platforms. They can appear as videos, images, search engine results, LinkedIn content, and more.

Challenges and Considerations

While native marketing has the potential to do so much, they also come with some ethical and production constraints.

Budget Planning & Auction Bidding

While native ads can be cost-efficient, this doesn’t mean they’re cheap. Ad placements are costly, especially when it’s only the highest bidder that gets to display their ads. So, you need to budget a lot to use this type of advertising, and its cost differs from platform to platform and from brand to brand. Many experts also advise that native advertising should be part of a larger marketing strategy and not the only focus.

Content-Heavy Strategy

Good audience awareness, cohesive storytelling, relevance, and other qualities are important when creating a native ad. This makes this type of advertising rather content-heavy and more difficult to create compared to simple banner ads. So, you must have a team committed to these efforts before this ad can be successful, as native ads won’t work with weak creatives.

Transparency & Disclosure Risks

Native ads are known for their seamless integration into the regular content of a platform, so some users have trouble telling them apart. So the users could engage with the material and end up feeling betrayed when they discover that it's an ad.

As such, one of the regulations of the Federal Trade Commission (FTC) is to appropriately disclose when a product is being promoted. This is what the “Sponsored,” “Recommended by,” and “Promoted” labels are for. If an advertiser doesn’t do this or isn’t transparent enough about their advertising, they can face civil penalties of up to $50,120 per violation.

Not Ideal for All Funnel Stages

Native ads are best for when a brand wants to build audience awareness and gain credibility. This makes them perfect for top-of-funnel marketing initiatives. If you’re using this ad for conversion purposes or other performance-focused campaigns, you’ll need to pair it with other ad types.

How to Create a Native Ad Campaign

There are six steps to creating a native ad campaign, which include the following:

1. Define your goals
2. Understand your audience
3. Choose the right platform & format
4. Develop high-quality content
5. Set up targeting and distribution
6. Monitor & optimize performance

1. Define Your Goals

Before you start a native advertising campaign, you must have a clear goal in mind. Common goals for this ad are lead generation, brand awareness, conversion, sales, and more. Pick a goal, and you can align your marketing campaign to it.

2. Understand Your Audience

You must be able to tell the pain points of your audience, what drives them, what they desire, their best platforms, etc. Simply put, you must have a clear image of who your audience is. This information can be gotten using tools like the Blockchain-Ads Analytics tool, Meta Insights, LinkedIn Analytics, surveys, product feedback, and more.

3. Choose the Right Platform & Format

With a good idea of who your audience is, you can look into the platforms they visit and the type of content they prefer. This will help you determine the platforms where you can unveil your native campaign and the content that’ll capture the attention of your audience.

4. Develop High-Quality Content

Next is to develop high-quality content. Native ads are better at value-driven storytelling than a sales pitch. So you can consider whether you’ll create a branded video, sponsored listings, a recommendation widget, a social media post, etc.

5. Set Up Targeting & Distribution

Now you’ll need to use both paid targeting (on sites like Blockchain-Ads, Google and Facebook) and proven content distribution networks, like Revcontent, and Outbrain. This ensures that your digital advertising efforts get wide exposure on the internet.

6. Monitor & Optimize Performance

As the campaign goes live, it's important to keep an eye on its performance. Track key engagement metrics, and based on its results, refine your campaign with methods like A/B testing and headline tweaking.

How to Measure Native Ad Performance

We can measure the performance of native ad campaigns through a number of metrics. These metrics include:

1. Click-through rate

Measuring the performance of a native ad through key metrics is important to understand its impact and optimize it for the future. Some of the metrics to track for this purpose are:

• Click-Through Rate (CTR)
• Engagement metrics
• Conversions
• Bounce rate

Click-Through Rate (CTR)

The CTR measures the curiosity of the consumers and shows if the ad is a good match for the advertising audience. That’s why a high CTR shows that the users find the ad compelling and are willing to know more.

Engagement Metrics

Things like time on page, scroll depth, comments, and shares (for social media posts) show how well users engage with that ad. So, an effective ad is one that the users spend time on and engage more with.

Conversions

Although native ads usually push for brand awareness, they can still track measurable actions. They can track the number of downloads, signups, sales, and other desired actions that advertisers want users to complete.

Bounce Rate

An ad that doesn’t align well with the interests of the users will lead to a high bounce rate. Users will click on that ad, visit the landing page, and immediately leave. So, it's a sign that you must redesign your landing page and review the ad to better align with your audience. So, you should always aim for a low bounce rate.

Native Advertising vs Other Formats

While native advertising is all the rage these days, there are times when other forms of advertising are more efficient in reaching your target audience. These include

• Display ads
• sponsored content
• Video ads

Let's go over each ad format and how they compare against native ads.

Native vs Display Ads

Native ads are the key to lower ad fatigue, as they are non intrusive and blend in with the regular content. They offer high CTR and are a top-of-funnel fit. They also work well for precise targeting.

Display ads, on the other hand, are cheaper to implement than native ads and are great for widespread reach. They are also another top-of-funnel option as they aim to promote awareness. However, they suffer from high ad fatigue.

Native vs Sponsored Content

Native and sponsored ads look similar at a glance, but there are quite a few similarities between the two. Where native ads are designed to blend with other content on a platform, sponsored content doesn’t need to do this. Native ads go in-depth with their storytelling while subtly promoting a brand. Sponsored ads, on the other hand, are longer-form storytelling that a brand pays a media outlet to publish.

In the end, native ads are marketing efforts that are integrated into a platform, while sponsored ads are a collaboration between publishers and brands.

Native vs Video Ads

Native ads can sometimes appear in the form of a video, but they always blend well with the other content on that page. Video ads, on the other hand, can lead to a disruptive experience for consumers on that page. So, where video ads interrupt the natural user experience, native ads promote it. Besides that, both types of ads are good for visual storytelling and command user attention.

Final Thoughts: Should You Invest in Native Ads?

You should invest in native ads for your business since they blend seamlessly into the content of the platform where they appear. They copy the feel, tone, format, and appearance of wherever they are displayed and never disrupt the user experience. This makes them a more acceptable form of advertising today, one that offers higher CTR and allows brands to boost their credibility. The tradeoffs for such capability are the content-heavy nature of this ad, its cost, and the potential to misuse it, hence requiring strict regulation.

Nonetheless, native advertising is at its most powerful when it is paired with high-quality content and strategy. This allows digital advertisers to reduce the ad costs and improve their ad campaign.

So, if you want to use native ads in your next campaign, ensure you explore the platforms where your audience can be found. Determine the content your audience usually engages with, and you can start testing with pilot ads. Or you can download a planning guide and follow its instructions.

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