More than likely you are suffering from what the industry has coined as “banner blindness” or the growing phenomenon where people ignore banner-like information. This trend has become increasing more apparent as display ad click-through rates have nosedived over the years and the average CTR is now a paltry .1%
So what are marketers doing to save us from ineffectual banners? Enter native advertising.
What is native advertising?
Native advertising refers to digital ad formats that integrate more seamlessly and transparently into website aesthetics. Another way to look at it is a paid-for-placement within a digital content stream that promotes a brand much the same way that editorial content is promoted on a specific site. This is a very different approach than a display ad, which is often disruptively placed and links consumers away from the website they were originally on in the first place.
Native advertising has quickly become popular with digital publishers as they look to increasingly monetize their sites and media buyers as they look to improve ROI. A July 2013 Online Publishers Association research study revealed that almost three quarters or 74% of their members are currently offering native advertising and an additional 17% are considering offerings this year.
In April 2013, BIA/Kelsey estimated that native spending in the context of US social media advertising would climb to $4.6 billion in 2017 from $1.63 billion in 2013. And they forecasted that native spending will grow at a faster rate than display advertising through 2017.
The numbers are telling. In an era where people are turned off by intrusive banner ads and publishers are under pressure to monetize, native advertising has the potential to be exceptionally powerful. Advertisers can expect to benefit from higher awareness and effectiveness with ad formats and placements that are integrated into the native user experience of the site. When done well, the ad execution can actually enhance the user experience.
Take Facebook’s Page post ads. Available on desktop and mobile, Page post ads are advertisements that begin as posts on a fan page but get additional paid distribution among fans, friends of fans or non-fans in their News Feed—the most engaging part of the Facebook on both desktop and mobile. They can be links, photos, videos, events or statuses—what people have come to expect from the content already in their News Feed. And they can include social context such as Likes, comments and shares.
It’s not surprising that bands delivering ads featuring beautiful images, compelling copy (think offers/discounts) to relevant audiences have an opportunity to drive clicks and conversions. A Nanigans study revealed that Page post ads in the Facebook News Feed deliver a 26x higher ROI than banner like domain ads on the right hand side.
Native for Mobile
Not only is native advertising revolutionizing desktop advertising, it is also taking off on mobile. Feed based layouts are the preeminent mobile design layouts for the leading web publishers—Facebook, Twitter, Pinterest, Instagram, Tumblr– and they are increasingly being adopted by mobile publishers of all types. For marketers who have long struggled with the effectiveness of tiny rectangular mobile banner ads, larger ad units within users’ feeds represents a way to solve their concerns around value with value being deliver to the advertiser and consumer alike.
The era of native advertising is upon us.
As the Native Advertising world evolve, marketers are looking for more finite approaches to measuring and predicting campaign performance. At Nanigans, we help performance marketers buy and optimize their native ad campaigns for predictive lifetime value (LTV). This allows them to more accurately understand the true return generated from their investment or the purchase revenue generated from the people they reach with their ads. We’ve found that marketers who focus on lifetime value and optimize campaigns based on true ROI by leveraging maturity curves and predicting purchase behavior over time are the ones profitably scaling budgets across desktop and mobile.
It’s no secret that banner advertising is no longer commanding people’s attention. Marketers are increasingly looking to deliver advertisements featuring content that blends with the experience of publishers website, are meaningful to user, and can be shared socially. By using seamless native ads to distribute their message across the web and mobile apps, we predict that marketers will begin to see much better returns on their advertising spend.