Native Advertising vs. Programmatic Advertising in 2020

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  • 6/10/2020
    Here’s a fun fact for you! The first display advertisement was published on the internet in 1994 on behalf of AT&T McCambley. It was a banner ad and it looked like this:
    We aren’t sure where to start. The tie-dye font on black? The confident aura this banner ad gives off, ensuring the user that they WILL click their mouse right there? The excessively long arrow? Would you click on that ad today, or would you automatically write it off as spam? 
    Internet users today are much more ad-savvy than they were in 1994, meaning marketers have had to get creative with advertising formats and placements in the past two-and-a-half decades.  The many advertising options marketers face can lead to confusion with new terminology and buzzwords. What are display ads? What is programmatic advertising vs. native advertising? And what about ads that don’t look like ads at all?

    Native ads are on the rise

    Native ads are subtle-yet-effective, delivering such unrivaled performance that their popularity is on the up and up. According to Taboola, a major advertising platform, advertisers are expected to spend around two-thirds of their display advertising budget exclusively on native ads in 2020. 
    native advertising vs programmatic trends from 2016 - 2020
    Centro, another big advertising platform, found that the use of native advertising is expected to grow 20% in 2020, hitting over $44 billion in spending in the U.S. 
    If you’re with us so far, awesome! If the term “native advertising” is more of a buzzword you’ve heard in passing at conferences or on marketing podcasts, you may be wondering how native ads fit into the concept of programmatic advertising. We’re here to set the record straight.

    What is programmatic advertising?

    Programmatic advertising is the automated buying and selling of digital ads using software. Many formats and channels are supported with programmatic advertising. Ads can be placed on mobile, desktop, tablet, connected TV and more. They can be placed in a few different formats:
    • Image ads containing text and image.
    • Audio ads that appear in podcasts, internet radio and music streaming platforms like Spotify.
    • Video ads which can appear as native ads blended throughout a webpage or in-stream within certain video players (excepting YouTube).
    how programmatic advertising works

    What is native advertising?

    Native advertising is an ad that is designed to look and feel like it matches the surrounding content. It can use the same font, image sizing and/or format as the other content on the page. These ads appear native to the page because they blend in with the rest of the content, meaning they’re less likely to get skipped over as an obvious sales pitch.
    These ad types are shown most often in a website’s feed or as promoted content. They require the brand name, a short headline, short description, brand logo and creative image assets. Here’s an example to show you what we mean. 
    native advertising example on website
    Native ads can also appear on social media without disrupting or annoying the audience. For example, Twitter places text-based native advertising above the trending topics on its sidebar.


    How are programmatic and native advertising different?

    Think of it this way: native advertising is a subset of programmatic advertising. All of the following are true:
    • All forks are silverware, but not all silverware are forks.
    • All squares are rectangles, but not all rectangles are squares.
    • All native ads are programmatic display ads, but not all programmatic display ads are native ads.
    Native ads are different from your standard banner display ads. When creating your programmatic advertising strategy, you have three options for advertising types: display, video and audio. The category of display ads also includes standard image ads, HTML5 ads and native ads.
    A native ad generally drives more engagement because they fall within existing content, making them seem more natural to the user. According to Outbrain, native ad clickthrough rates are around 0.2% while general display ads hover around 0.05%. That means native ads are four times more likely to be clicked on!
    Native ads can be run in conjunction with standard image and HTML5 display ads, or run separately. Generally, we recommend running them in conjunction with other display ad types, meaning the advertising platform chooses which ad type to show and when to show it. However, if the native ad types appear to be outperforming standard display ads, that’s a great time to pull those out into a separate native-only option on your platform, isolating it to its own tactic.

    Why choose native ads?

    We’ve already touched on the high-performing nature of native ads, but if you need a little more encouragement, here are five reasons to choose native advertising.

    They’re cost effective.

    Let’s be real for a second: Many marketers have yet to unlock the power of native advertising. They don’t teach practical native advertising strategy at most colleges and they’re still a fairly misunderstood branch of digital ads. 
    But hey, that loss is your gain! Native ads tend to have less competition, leading to lower base CPMs (cost per thousand impressions) and making them a cost-effective choice for your business.

    They get more attention

    Even if a user doesn’t click on a native ad, they’re still very attention grabbing. According to Centro, 52% of users look at native ads more frequently than display ads. So much more so that a native ad headline “yields 308x more consumer attention than processing an image or banner ad.

    They deliver more clicks for less.

    Native ads tend to have a lower cost per click rate simply because they’re clicked on more often. In a CPM cost structure, driving more clicks is key to site traffic. Native ads can help you get there.

    They get VIP placement

    Native ads can be shown in premium ad inventory spots. Most users ignore or generally don’t click on banner or standard display ads because of their location at the top of the page and on sidebars. Native ads blend into the content, eliminating the users’ honed ability to block out the top and side of the page.

    They’re quite discreet.

    Ads-that-aren’t-ads are the currency of the digital age. The “sponsored” text associated with native advertising is usually smaller, greyed out and not immediately noticeable, making the ad appear less invasive to the user.

    Common native advertising questions

    Before you rush out into the great big world of possibilities in native advertising, we’ll leave you with the answers to a few common native advertising questions we often see asked. 

    Do I need a separate native advertising platform?

    No, if you’re already using programmatic advertising you can continue to use the same platform. Just indicate to the system or to your platform representative that you wish to incorporate native ads. Then update your creative assets to meet capability requirements like headlines, images, preview text, etc.

    Are native ads more expensive than other ad types?

    No! Like we mentioned before, most brands stay away from native ads. This means these ads have efficient and generally lower CPM and CPC rates.

    Is sponsored content on the web native advertising?

    Generally, yes, native ads will have some variation of the words “sponsored content” in the ad. It is often discrete so that the user cannot notice it, making the ads seem even more like part of the content.

    Can you use native advertising on social media?

    Yes! As in the example we showed above, social networks have incorporated native advertising options, usually in the form of sponsored content. LinkedIn, especially, is a great platform for native ads. 

    Does thunder::tech offer programmatic and native advertising services?

    Yes! We have an in-house demand side platform allowing us to run programmatic advertising and specifically native ads. 
    Interested in learning more about native ads? Our team is standing by ready to revamp your ad strategy. Get in touch and let's talk.
    About the author::Dan Lyons is a Digital Marketing Team Lead at thunder::tech. He develops and implements well-rounded digital campaigns that help clients achieve their business goals. He's best described as a positive, hard-working person who enjoys working out and a good laugh.
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