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What is native advertising and how does it work?

native advertising examples featuring sponsored three social media posts against a pink background

Consumers are inundated with banners and popups on a daily basis, making it evermore important for brands to find more strategic ways to reach their audience. Native advertising is a dynamic and effective way for brands to do this, providing meaningful sponsored content that does more than just sell.

From sponsored blog posts and branded Instagram filters, to search engine advertising—native ads help drive traffic when you create a website, increase sales and most importantly—build trusting relationships with new and existing audiences. And with an expected increase of 372% on native ad spend between 2020 to 2025, this is one marketing strategy you don’t want to miss.

In this article, we’re diving deep into what native advertising is, what the benefits are as well as the different types to be aware of.

What is native advertising?

Native advertising is a type of online advertising in which sponsored content blends in with the content surrounding it.

The main benefit of this form of advertising is that it’s less intrusive than other types of advertising, such as pop-ups or banner ads. Visitors are more likely to view native ads as trustworthy because they’re not explicitly promotional and/or match the look and feel of the page around it. Native ads ultimately aim to create a mutually beneficial experience that pleases all parties involved: your business gets to promote its products to a relevant audience, while users get to enjoy the content they’re consuming with minimal disruption. It’s a win-win.

Why use native advertising?

When done right, native ads can be a highly effective form of online advertising. Because they appear like a natural part of the content, they convey value rather than distracting users from the primary reason they decided to visit a website or open an app. In fact, audiences find native ads 62% easier to understand than display ads, and 31% easier to understand than social ads.

This can result in 20% to 60% higher engagement and three times the retention compared to banner ads.

However, there are some risks worth mentioning. Some claim that these types of ads can be deceptive to consumers if they’re not properly labeled. For this reason, you’ll need to be careful when integrating native ads into your content to ensure that you remain transparent, plus compliant with Federal Trade Commission (FTC) guidelines.

7 types of native advertising

There are several types native ads your brand can utilize as part of your overall marketing strategy. Here are the primary forms you should be aware of:

01. Paid search ads

Paid search ads are a form of search engine marketing that seamlessly match the platform they’re placed on. For example, when you search for something on Google, the first few results you’re shown are ads that have been paid for by the advertiser. However, they appear identical to the rest of the search results, with the addition of the word “Ad” placed next to each header.

sponsored ads on Google search pages as an example of native advertising

02. Display ads with native elements

This type of advertising combines elements of both native and display ads. While display ads are unrelated graphic advertisements on a page consisting of banners, video, text, images or audio, display ads with native elements contain content that ties them to the rest of the page. They’re usually placed in strategic positions, such as on a webpage’s header or sidebar.

03. In-feed units (aka “sponsored social media posts”)

The simplest way to understand what in-feed units are is to look at your Facebook or Instagram feed. You’ve probably seen hundreds of ads that appear in your feed, but they don’t look like typical ads. Instead, they appear as the posts you’re used to seeing from the friends and brands you follow on the platform.

Like search ads, these native ads will also likely mention that they’re paid. On Facebook, for example, you’ll see the word “Sponsored” under the title, indicating the company has paid the social media platform to show it to you.

On other platforms, you might see similar ads in the middle of organic content, such as an article that links to a third-party website. These will also be noted as sponsored content to avoid misleading a publisher’s audience. However, the ad will be relevant to the rest of the content on the page, making it appear more natural.

a sponsored social media post for Wix on Facebook as an example of native advertising

04. Sponsored product listings

Similar to paid search ads, sponsored listings are the ads you see on an eCommerce marketplace when you search for an item and see a list of matching products. Amazon is one of the online retailers that does this best.

Sponsored listings look the same as other results on the list—the only difference is that they’re usually displayed at the top of the page and are accompanied by the word “sponsored.” Because sponsored listings are still relevant to a user’s search query, they usually have good results in terms of conversions and clicks.

05. Branded content

Branded content is when a business and a publisher agree to create content to promote a specific brand or product. This can take on many forms, but it’s most often seen in publications like blogs or news sites when an article showcases one brand exclusively.

The benefits here are twofold: First, readers are exposed to the brand’s message while scrolling through the publication’s regular content. Secondly, you'll get to capitalize on a new audience of readers who trust the publication you collaborate with, and the articles they publish.

06. Content recommendations

Usually found at the end of an article or blog post, content recommendations show other articles that relate to a user’s interests or browsing history. This section may be titled “You Might Also Like…” or “What We Recommend Reading Next.” To a reader, any ads within this section may seem like simple recommendations for similar articles, but for advertisers, it’s a powerful tool to redirect traffic from heavily-visited publishers back to their own pages.

Content recommendations usually have enticing images and headlines, encouraging readers to click through. This method of native advertising has been shown to result in up to 53% more page views than clicks coming from search engines. Moreover, providing recommendations is also a cost-effective way to market content on a website, with each click from a publisher’s platform usually costing only a few cents.

a blog featuring a sponsored blog post as a native advertising example

07. Custom in-app ads

Custom ads can take on almost any form and are reflective of many of the innovative methods of personalization we see used today in digital marketing. A custom native ad can be anything from an Instagram filter created by a brand or even an ad that runs in music playlists. For example, if you create a running playlist on Spotify and then get ads for running shoes while listening to it, this would be considered a custom native ad since it matches the content you’re interested in.

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