Standing in New York's Times Square gives one the perfect visual of how display advertising works. These messages vie for our attention by trying to be bigger, brighter, and louder than other messages also trying to stop us in our tracks and take notice.

Though those messages have a certain appeal, savvy digital marketers have a different way of reaching their target audiences. One could argue that a successful online advertising campaign has many more differences than similarities to the Times Square ads. The most notable difference between the two is that online marketing has the potential to be effective even when it's subtle. In fact, one type of advertising that's gained popularity over the past few years, native advertising, is sometimes indistinguishable from the environment where it appears. And, if you have yet to discover the power and potential of this medium, you'd do well to keep reading.

The 411 on Native Advertising

"Native advertising is a form of online advertising that matches the form and function of the platform on which it appears," according to Wikipedia. Readers perusing Time magazine's website, for example, are presented with a variety of content, including articles written by Time's editorial staff, alongside those written by advertisers, like Outbrain.

The word "native" refers to the content's coherence with other media on the platform. The general rule of thumb when using native advertising is to stop thinking about advertising and start thinking more about engagement.

Some of the advantages I've seen with native advertising include...

  • Positive user experience. By being less intrusive, good native advertising enhances a user's experience, which makes it desirable for brands to be associated with positive online experiences.
  • More shareable. When was the last time somebody shared a banner ad with a friend? Native advertisements, on the other hand, not only get their immediate audiences to take action, they even generate shares similar to well-written editorials. (See Point 3 below for the caveat to this statement.)
  • Better click-through rates. Due to a higher audience engagement, native advertising creates a substantially higher click-through rate than other forms of digital advertising. A person is more likely to complete Navy Seal training than click a banner ad, according to Solve Media. Our company's experience working with an unnamed university client on a native marketing campaign, on the other hand, contributed to a reduced cost per click (CPC) of 40% and an audience response rate that was 400% higher than previous online advertising campaigns.

As it is with any type of advertising, there are specific steps that must be followed to achieve the desired results.

Here are three native marketing best practices you should keep in mind:

1. Understand your consumer. One of the drawbacks of traditional display ads is that they don't discern their audience. They're there for all to see. In regards to digital advertising, and in particular native advertising, this is a pitfall that must be avoided. The more you know about the type of person who buys your products or services, what he or she is looking for, and where those people hang out online, the better your chances of obtaining the kinds of results the university client mentioned earlier experienced.

2. Understand the platform/site you're advertising on. There are hundreds of online marketplaces offering native advertising—and probably a dozen or more that have an audience that aligns with your offering. To further discern the best fit, you need to gain a better understanding of a potential marketplace's platform/site.

In the example cited earlier, we chose the Yahoo Gemini marketplace for our university client. In addition to meeting the client's audience requirements, Yahoo Gemini supports a hybrid display ad unit where images complement text and serve up as a native ad in the stream of content.

Placement is bought on a per-click basis, similar to search engine advertisements, and Gemini gives advertisers one place to purchase native ad units and search advertisements. Additionally, native ads are triggered by the content on the page as opposed to keywords for search advertising used by other marketplaces.

3. Content is (still) king. Marketplaces gain popularity by providing content their audiences find valuable. Native advertisements are an extension of that trusted relationship in that they provide additional value in a similar format as other content on the site. With that said, one of the quickest ways to break that trust is by focusing only on having a compelling headline that isn't backed up by valuable content. Even worse is using a compelling headline to bait readers to engage with your message and then switching to something completely different than what is implied in the headline.

Being genuine is paramount with native advertising. Any attempts to trick readers or viewers into engaging with your message could cause your message to become associated with a negative online experience, which could be damaging both to your company and the marketplace you're using to promote your ad. If you want to experience the full potential native advertising has to offer, make sure you don't skimp on producing valuable content.

* * *

If I painted the picture that native advertising is perfect, I did not mean to do so. As with anything else, there are drawbacks for both advertisers and publishers. You only need to look at the Scientology placement on The Atlantic and the subsequent fallout as reported on Adweek to understand some of the potential risks.

My experience, however, is that if you find a reputable marketplace that meets your clients' audience requirements and you combine that with content that provides real value to that audience, the results can be good. Shockingly good.

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Daniel Wilkinson is executive vice-president of Jellyfish Online Marketing, a global, digital marketing agency.

LinkedIn: Daniel Wilkinson