It isn't often that a new digital advertising concept, no matter how innovative, makes such a vivid and compelling impression on advertisers and publishers alike. But that’s exactly what’s happening with native advertising.
Barely known or understood three years ago, today native advertising one of the hottest topics in digital media. According to data from BI Intelligence, spending on native advertising is poised to reach $7.9 billion this year and grow to $21 billion in 2018, rising from just $4.7 billion in 2013. And according to a poll conducted by Mixpo on the number of U.S. publishers who offer native advertising, nearly three-quarters of respondents confirmed they offer a native advertising solution while an additional one-fifth planned to do so within the next few years.
Your company is probably already exploring the role that native advertising can play in your own marketing programs—just as many other companies around the world are. But if you haven't yet stumbled upon this million-dollar-idea, this blog post is for you. Whether you're intrigued by the increased efficiencies of programmatic native advertising, or by the high-usability of a specific programmatic platform, here are three reasons why so many digital marketing specialists are jumping head-first into native advertising.
1. ADVERTISERS ONLY WANT TO PAY FOR AUDIENCES OF INTEREST
Programmatic buying, much like native advertising, came onto the scene in a big way. In 2013, Forbes published an article titled: “What Is Programmatic Advertising And Is It The Future?” Just two years later, programmatic has become an industry standard.
So what makes programmatic so popular? The simple answer is: efficiency. Before programmatic buying arrived, digital ads were bought and sold by human ad buyers and salespeople, which was time consuming and expensive. Moreover, advertisers were at the mercy of publishers who controlled the price. With programmatic buying, however, advertisers can buy digital ad inventory at scale, while precisely targeting specific audiences.
What programmatic does is essentially automate all of the processes that used to give advertisers headaches. You can define your budget, goals and targeting parameters while the platform adjusts dozens of variables in real-time to determine the right campaign settings to achieve your desired ROI. Many platforms (StackAdapt’s included) also nurture conversion activity by combining collected campaign/audience data in real-time and optimizing accordingly. And this is all made possible by real-time bidding (RTB) technology.
Real-time bidding (RTB) is the backbone of programmatic buying. It involves computerized, algorithm-driven trading, and allows for quick buying of ad inventory according to pre-set parameters. It’s incredibly efficient—especially when compared to manual buying—and also incredibly granular. RTB gives advertisers the option to bid for inventory only when the specific audience they want to display their ads to is available. This allows for much more precise targeting, and, in turn, a better ROI.
RTB also gives advertisers the flexibility to buy inventory granularly and set different bids for different types of audiences. And thanks to more detailed segmentation of first-party data and incorporating third-party data, you can target specific users who ready to convert. To give you an idea of the range of available targeting options, StackAdapt can target audiences based on intent data, behavioral data, geographical location, contextual relevancy, and more. Furthermore, RTB can be run on an impression by impression basis, which means that bids can be adjusted and optimized to result in a higher ROI.
2. ADVERTISERS NEED SOLUTIONS TO COMBAT BANNER BLINDNESS
As a digital marketing specialist, we’re sure you’re aware of the fact that banner ads simply don’t perform like the used to. While the average click-through rate (CTR) for display ads was 0.9 percent 15 years ago, today that number has dropped to around 0.08 percent. According to data from Solve Media, you’re about 475.28 times more likely to survive a plane crash than you are to click on a banner ad.
When advertisers became savvy to these facts, they started looking for new ways to engage with their online audiences. Content marketing grew out of this need, built on the belief that clients will reward you with business if you deliver valuable, relevant and non-promotional information on a consistent basis, free of charge.
These content creators quickly realized that banner ads, given their low CTR, were unsuitable for distributing branded content, so they turned their heads to a new and more effective channel: native advertising.
In a way, native advertising can be understood as a solution to the inflexible, ineffective and non-mobile-friendly banner ad. The numbers certainly support the premise: consumers look at native ads 52 percent more frequently than banner ads, native advertising generates 82 percent more brand lift, and purchase intent is 53 percent higher for native ads. And this is particularly true when a native advertising campaign is tied to a pre-existing content marketing strategy. In fact, adding rich media to native ads can boost conversion rates by up to 60 percent.
We recently published a benchmarking study that was covered by Marketing Magazine after analyzing 1,500 native ad campaigns that appeared on over 30,000 publisher sites. According to our findings, native ad click-through rates across our platform averaged between 0.4 percent and 0.8 percent, which is considerably higher than benchmark CTR for display ads (0.14 percent in Canada and 0.08 percent in the U.S.).
Another area in which native advertising excels is engagement (time-on-site). According to our benchmarking study, readers spend an average of one-minute-forty seconds to three-minutes-ten seconds on branded content, which is on par with engagement levels of editorial content.
This success can be attributed to native’s ability to display ads to users who are in a “content consumption mode.” Whereas banner ads tend to go unnoticed, engagement is high in programmatic native because advertisers can target a high-engagement audience and optimize towards more engagement.
3. DIGITAL MEDIA SPECIALISTS WANT MORE CONTROL AND TRANSPARENCY OVER THEIR DIGITAL BUYING
Transparency has become one of the biggest topics of conversation in the digital advertising space in recent years.
Galvanized by an apparent lack of transparency, many advertisers have become more and more vocal about their concern with something called “black box” syndrome—the idea that key information and performance insights aren’t being shared with advertisers. The good news is that some platforms have headed this call by introducing fully-transparent platforms with self-serve capabilities.
The benefits that stem from using a fully-transparent self-serve platform are fairly self-evident. First, they enable advertisers to have more control over their native ad campaigns by giving them the ability to take an active role in implementing an ad buying strategy. Digital marketing specialists in particular, given their tech-savviness, want control over the performance of their campaigns and the ability to access performance insights to understand why certain things are happening on specific channels with specific customer segments.
With improved bidding efficiency and the additional control over campaigns via self-serve platforms, fully-transparent platforms with self-serve capabilities address this lack of transparency. Running ads through a self-serve demand-side platform (DSP) allows for more control, centralized reporting, and gives advertisers more transparency into where their ads actually appear.
To give you some context about the relative ease of creating and operating a programmatic native advertising campaign, check out our resources page that guides StackAdapt customers on how to start a new campaign, upload creative, set a bidding strategy and apply engagement targeting.
Super easy, right? We think so.