Native Advertising: What is It and How Does it Work?

Advertising in places your target audience frequents—including third-party websites and social media platforms—is a great way to build your business’s brand awareness, increase leads, and get more sales. In recent years, native advertising has become the paid advertising choice for businesses and online publishers alike.

Unlike traditional paid advertisements, which feature intrusive pop-ups or banner ads, native ads are incorporated alongside existing content for better flow and an improved experience for consumers. Native advertising also allows your business to create ads that are more relevant to your customers. Your business needs to include native advertising campaigns as part of your overall advertising strategy to ensure success.

What is native advertising?

Native advertising is designed to be much more subtle than traditional advertising practices. Unlike display ads, which stick out on a website or social media channel, this type of paid advertising is much less intrusive to consumers because it matches the function and appearance of the native platform.

Native advertising follows the same visual format as the content it appears with to blend in more seamlessly. For instance, when using native advertising on social media, your ads would appear within a user’s feed. You can also choose to display your ad in one of the platform’s popular formats—a carousel or a reel on Instagram, for example.

These types of ads aren’t just for social media platforms, though. Native advertising also includes sponsored content on search engines or recommended content such as blog articles, videos, images, or texts, to name a few.

Since native ads are designed to be identical to the surrounding content, some consumers may not even realize they’re viewing or interacting with ads. However, native advertisements aren’t designed to mislead your customers. Typically, advertisers use the terms “sponsored,” “ad,” “promoted,” or “recommended” alongside the native advertisement to let consumers know they’re viewing an ad.

5 Benefits of Native Advertising

Native advertising benefits your business in numerous ways, including:

Higher Engagement Rates

Since native advertising appears in the same format as the content your audience already views and interacts with, it doesn’t look like an obvious ad. Consumers are less likely to scroll past it and are more likely to view and engage with native ads. In fact, native advertising is shown to be more effective than other ads, getting 53% more views and increasing purchase intent by nearly 20%.

Improved User Retention

Native ads focus more on informing or entertaining the viewer rather than pushing a specific product or service, offering a better overall experience. Your customers prefer them, too. A study by the Content Marketing Institute found that 70% of consumers prefer learning about products or services through native advertisements to traditional advertising campaigns.

Increased customer satisfaction is critical for both your business and the ad publishers. A less intrusive experience keeps users on the platform longer and helps you stay connected with your customers, improving retention rates.

Better Click-Through Rates (CTR)

One way to evaluate the effectiveness of your marketing or advertising campaign is by measuring your click-through rate (CTR). This metric demonstrates how many times people clicked your ad in relation to how often it appeared. According to the Native Advertising Institute, CTR for native advertisements is more than 8x higher than display ads. Increased clicks and conversions can lead to a higher return on investment (ROI) for your advertising campaigns and increase your overall sales.

Resistance To Ad Blockers

As of 2023, 31% of US consumers and nearly 33% of global consumers admitted to using ad blockers in response to intrusive and repetitive display ads on platforms. Fortunately, since native advertisements match a platform’s format and offer relevant content, they’re much less likely to be detected by an ad blocker—helping you reach a larger audience. Native ads are also great for building trust with your audience instead of making them feel attacked by too many ads.

Enhanced Brand Awareness

Native ads allow you to create tailored, branded content for each platform. Instead of developing banner or display ads that appeal to your entire audience across all digital channels, you can create more relevant ads for each segment of your target audience and individual channels. Not only does this increase overall brand awareness, it also delivers ads that align with your customers’ preferences.

5 Types of Native Advertising

Native ads come in various formats, and the best ones for your business will depend on the platforms your customers use and your advertising and marketing goals. Here are five types of native advertising to consider.

In-Feed Ads

You’ll find in-feed ads that blend in with existing content on websites and social media channels like Facebook, X (formerly Twitter), Instagram, TikTok, etc. These native ads are designed to appear with like content, meaning the ads will be more relevant to the users viewing them. For instance, a TikTok user who follows a lot of cooking accounts will see ads for relevant products, such as cookware or knives. In-feed ads help companies boost brand awareness and lead generation to gain new customers, along with helping increase engagement and conversion rates of marketing campaigns.

In-Game Ads

This type of native advertising appears within games and is a great addition to your mobile marketing efforts. In-game ads are designed with the game’s aesthetics in mind so they don’t take away from a user’s experience. Typically, they’re offered as an opt-in video, audio, or image users can view in exchange for game rewards. This format results in a better experience and higher engagement for users, as they won’t end up frustrated or annoyed by an interruption in their game.

In-App Videos

In-app native video ads promote your brand or specific products or services. They can play before, after, or even during other video content in a streaming app. Native advertising videos typically have a high production quality and feature an eye-catching story or action to attract and engage viewers. Video-based native ads aren’t limited to YouTube or other streaming platforms; they can also be included on web pages or articles as complementary content.

In-Search Native Ads

These native ads appear in your search results page or sidebar and are visually similar to other organic results, often including a headline and snippet in addition to the link. Unlike other paid search ads, native in-search ads are designed to blend in with the surrounding search results, so users are less aware they’re looking at an advertisement. Benefits include increased trust, as consumers can see that the link is relevant to their interests. Native ads also increase engagement.

Sponsored Content

This form of native advertising is a great way to increase brand awareness. Sponsored content, also known as branded content, includes articles or blog posts, videos, and other content forms that are published on a third-party site alongside the publisher’s other editorial content. Think of an article or listicle published by BuzzFeed or an Instagram video where an influencer promotes a brand, product, or service—these are examples of sponsored content.

Content is typically labeled as “sponsored content” so the audience knows they’re viewing an ad, and it may be created by the publisher independently or in collaboration with your brand. This type of native advertising informs the audience about your brand and helps build trust by offering testimonials or product reviews.

Native Advertising Platforms and Networks

To implement native ads, your business can connect with advertisers and publishers using ad networks. Each network has its own unique features, benefits, costs, targeting capabilities, and more. You’ll find three of the top native networks below, so you can find the right ad network based on your goals and budget.

Taboola

Your business can reach over 10,000 top publishers—including CBS News, USA Today, NBC News, and Business Insider—-and 1.3 billion unique users each month through this native advertising platform. Taboola targets users by location, device, and first-party data, offering in-feed and in-article ads along with video-based native ads and customizable widgets. Costs typically range from $0.30 to $0.60 per click.

Outbrain

Outbrain is a self-service native advertising platform that offers advanced audience targeting and retargeting options in addition to interest, device, and location-based targeting. The platform reaches over one billion unique users per month, with at least half coming from Tier 1 geographies like the US. Outbrain partners with top publishers, including The Washington Post and CNN, and supports in-feed native advertising, content recommendations, and in-search ads. Pricing starts at $0.03 per click but can range up to $0.50/click.

Revcontent

Revcontent partners with leading advertisers and publishers like Forbes, Tribune Media, and the Los Angeles Times to help expand your reach and monetize your online presence. The platform’s targeting options include consumer preferences for topics and brands as well as location, device, and browser-based targeting. Revcontent offers in-feed native ads and videos with customizable placement, and it has a reach of 180 media monitor (mm) attributions daily. Your business can choose between cost-per-click or cost-per-1,000-impression pricing.

Native Content Creation

The best native ads feel organic and engage your audience. When creating your own native ads, keep the following tips in mind.

• Consider your audience: Before developing your native ads, think about the audience you will be targeting. Your ad’s headline, image, and content should appeal to their preferences and needs.
• Clarify your native advertising goals: Are you using the ad to introduce a new product, generate more brand awareness and leads, or boost sales? Knowing the purpose of your native ad can help determine which type is best for your goals.
• Incorporate engaging images and storytelling: Prospective customers need to be able to connect with your brand and its products or services on an emotional level. That means using high-quality images to draw attention and developing compelling scenarios or characters that resonate with your audience.
• Align your content: On a basic level, the elements of your native ad—including your headline and image—need to align and complement each other. You also want to ensure that if a user clicks on your ad, the content they’re taken to is a continuation within the context of their experience. For example, if your native ad depicts a particular car model, the user should be directed to that model’s page on your website.

Partner With Podium To Improve Your Advertising Strategy

When done correctly, native advertising can help your business build a brand story, increase leads, or promote your products or services. But it’s just one piece of your overall advertising and marketing strategies. Your company also needs the right tools and processes to ensure prospects turn into satisfied, loyal customers. That’s where Podium can help. Podium offers businesses AI-powered solutions to capture and convert more leads, helping you get 30% more sales. Watch a demo to learn more.