Native Ads - A Growth Tactic You Need To Follow

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This post is the first part of an ongoing series, Growth Tactics You Need To Be Following.  Being early to new distribution channels is a key to fast growth. I have 10 new growth channels and tactics I am watching.   I am going to publish half publicly, and half privately to my email list.  If you want to get all of them, make sure you subscribe.   

21X higher CTR, 79% lower CPC, and 77% lower CPA.  These are just a few reasons why native advertising is one of the top growth channels and tactics I am keeping my eye on. More specifically, native ads within mobile.  In this post you will learn:

  • What are native ads?
  • Why native ads are important for mobile.
  • How native ads will be critical for anyone doing content marketing.
  • Where native ads are growing.
  • Whether or not you should be considering native ads.  

What Are Native Ads?

For those of you who aren’t familiar with native ads, native become the buzz word among the ad world some time last year.  Native advertising is still developing and thus there are multiple definitions out there about what exactly constitutes a native ad.   Here are the elements I believe will ultimately end up being the standard:

1.  Content produced by or in conjunction with the advertiser (that ideally adds value to the user experience)

2.  Integrated into the core visual and user experience of the publisher

3.  Sponsored by (and marked there as) by the advertiser

The two most popular examples are probably Facebook newsfeed ads and Buzzfeed sponsored posts.  But there are a ton of other publishers that have native ad experiences as well (more on this later).

Effectiveness Within Mobile

I’m particularly interested in native ads within mobile.  Mobile ads suffer from taking an ad format designed for one medium (web) and forcing it in to a completely different medium (mobile).  The end result?  Horrible user experience, poor ad performance, and poor monetization for publishers.  It is a lose, lose, lose situation.  Native ads have the potential to fix a lot of this.  They are specifically designed to fit within a mobile experience, they perform much better for the advertiser and publisher, and when done right, add value to the user experience.  

Riding The Momentum Of Content Marketing

But one of the reasons I’m most interested in native ads is due to the rise in content marketing.  Content marketing is extremely effective but it suffers from one main problem.  Creating really good content (and I should emphasis good since there is a lot of crap out there) requires a lot of time and investment, but distribution isn’t guaranteed.  Distribution tends to be limited to your following, part of your following’s network (if your network shares it), and maybe broader if you get some press or SEO from the content.  The problem is multiplied when you are just starting out and don’t have a large following to push the content out for you.  Native ads have the potential to help solve this problem in a couple ways:

1.  ”Guaranteed” Distribution - To help you justify the investment and get over the cold start problem

2.  Targeting - Ability to get the content in front of a specific audience rather than hoping your target audience comes across it from sharing, press, or other promotion.  

3.  Expanded Reach - Can help you reach new audiences beyond 2nd degree connections of your followers  

Early Proof:  Facebook Newsfeed Ads

Facebook started doing newsfeed ads earlier this year which are basically native ad units.  From everything that I’ve seen they are working extremely well.  The CTR’s have been much higher compared to other formats, CPC’s have been lower, and conversion from clicks have been higher.  A report by AdRoll in July showed that Facebook Newsfeed Ads had:

-  21 times higher CTR than display retargeting

-  79% lower CPC than display retargeting

-  77% lower CPA than display retargeting

The numbers are even more impressive compared to Facebook’s sidebar ads.  Some of this effectiveness will drop due to the law of shitty clickthroughs as competition comes into the channel and users fatigue.  But Facebook is just the beginning… 

Native Ad Inventory On The Rise

New large publishers (Yahoo, Flipboard, Techmeme, etc) are ramping up their own native ad formats.  Native ad networks such as NamoMedia,  NativeXTripleLift, and AdsNative  (full disclosure, I am an advisor to NamoMedia) are enabling medium sized publishers to add native ads more easily.  In Twitter’s recent acquisition of MoPub, they are specifically saying that they are doubling down on expansion of native ads    The main takeaway?  The available inventory for native ads is on the rise.  When inventory increases, big brand advertising competition always lags which leaves opportunity for the early risk takers. 

What Could Hold Native Ads Back?

Ok, time to play devils advocate.  There are a couple things that could end up limiting native ads. 

1.  Context

Some publishers have very general inventory like Facebook.  But a lot of publishers have specific context to their native inventory.  In display (with retargeting) I could end up seeing a display ad that has nothing to do with the context of the site.  For example, currently on Bleacher Report (sports site) I am getting display ads for Apple products I recently checked out.  Imagine if in Bleacher Report’s content stream I got a sponsored article (native ad) about Apple products?  I would probably have a WTF moment. 

2.  Scale

There are three elements that may limit scale of native:

a.  Context - Described above.

b.  Higher Investment - Good native ad units will require a higher investment compared to other formats such as a google search ad or IAB display unit.

c.  Standards/Consistency - Part of native is being part of a publishers user experience.  But different publishers have different user experiences.  

Despite these challenges, I think native has the potential to become a major channel/tactic.  

Who Should Be Keeping Their Eye On Native?

Everyone, in my opinion.  But there are two specific groups that should have it higher on their list.

1.  Mobile first companies - if you aren’t using Facebook mobile newsfeed native ads right now, you are behind.  Get in the game.  Then take your learnings to where there is more native ad inventory.

2.  B2B - B2B companies are primarily using content marketing as their core strategy.  As I described above, I believe native ads will be an important extension to any content marketing strategy.  

Comments or questions?  I’ll be answering everything here on Quibb.  If you learned something I would greatly appreciate retweets. Want to find out the other growth tactics I am keeping my eye on?  Subscribe to my email list.  

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