Native advertising

Native advertising is a type of online advertising that matches the form and function of the platform on which it appears. For example, an article written by an advertiser to promote their product, but using the same form as an article written by the editorial staff. The word “native” refers to the content’s coherence with other media on the platform. Due to its ambiguous delineation from some other forms of marketing, particularly in certain instances of embedded marketing, the precise period of inception for native advertising is still debated.

Categories

The IAB (The Interactive Advertising Bureau), came up with 6 different categories to differentiate native advertisements.

  1. In Feed Ad Units. As the name denotes, it is an ad unit that is located within the website’s normal content well. The content may have been written by or in partnership with the publisher’s team to match the surrounding stories. It is measured on brand metrics such as interaction and brand lift. Example: Buzzfeed’s sponsored articles.

  2. Search Ads are generally found above the organic search results. Search ads have been sold with a guaranteed placement on the search engine page, and they are measured on conversion metrics such as a purchase. They have the same appearance as the other results on the page with the exception of disclosure aspects. For example, Google uses the word “ad” in yellow next to the paid post as means of disclosure.

  3. Recommendation Widgets. Although the ad is part of the content of the site, it does not look like the editorial content feed. It is delivered through a widget. It is generally recognizable by words like “You might also like” or “You might like”, “Elsewhere from around the web” or “From around the web”, “You may have missed”, or “Recommended for you.”

  4. Promoted Listings. The websites that carry these ad units, are typically not content based, rather they are usually e-commerce sites. Promoted listings are presented to look identical to the products or services offered on a given site. Example: Amazon’s sponsored products.

  5. In-Ad (IAB Standard). An ad in a standard IAB container that is outside the feed. “It contains contextually relevant content within the ad, links to an offsite page, has been sold with a guaranteed placement, and is measured on brand metrics such as interaction and brand lift.”

  6. Custom / Can’t be Contained. This category is left for ads that do not fit in with the other categories.

Forms

One form of native advertising, publisher-produced brand content, is similar in concept to a traditional advertorial, which is a pais placement attempting to look like an article.

Formats for native advertising include promoted videos, images, articles, commentary, music, and other media. Examples of the technique include search advertising (ads appearing alongside search results are native to the search experience) and Twitter’s promoted Tweets. Other examples include Facebook’s promoted stories or Tumblr’s promoted posts. Content marketing is another form of native advertising, placing sponsor-funded content alongside editorial content or showing “other content you might be interested in” which is sponsored by a marketer alongside editorial recommendations.

For some perspective, note that many experts consider the Hallmark Hall of Fame series as among the earliest instances of native advertising, airing since 1951. According to Grensing-Pophal, “The award-winning series is arguably one of the earliest examples of ‘native’ advertising—advertising that is secondary to the message being delivered, but impactful through its association with valued content.”

Amazon and many other companies advertise their content based on users’ search histories, but the difference between native advertising and other types of targeted marketing techniques is that native ads can be promoted through Facebook, Twitter, and other social media. It is “about how brands now work with online publications to reach people.”

Some consumers view these advertisements as “annoying” instead of useful, perhaps (according to Quigley) because people recall the days of the in-your-face advertorial. However, “if the content is useful and presents something your audience didn’t know before, they’re likely to trust it and refer back.”

The latest research has also shown that native advertising is thought to appeal to those now called Millennials.

Advertising disclosure

Native units blend with their surrounding (e.g. editorial articles, in-feed elements, etc.), which raises the necessity for clear disclosure to help the audiences distinguish between advertisements and content. According to FTC (The Federal Trade Commission), means of disclosure include visual cues, labels, and other techniques. The commonly used disclosure practices mentioned by the IAB include labeling the native unit as “Advertisement”, “Ad”, “Promoted”, “Sponsored”, “Featured Partner”, “Suggested Post”, etc. A widespread practice is to mention the brand name of the sponsor, as in “Promoted by [brand]”, “Sponsored by [brand]”, or “Presented by [brand]”. Publishers can also choose a different disclosure language (i.e. wording used to identify native advertising unit).

Platforms

The types of platforms and websites that participate in native advertising can be split into two categories, “open” and “closed” platforms:

  • Closed platforms are brands creating profiles and/or content within a platform, then promoting that content within the confines of that same closed platform. Examples include Promoted Tweets on Twitter, Sponsored Stories on Facebook, City, Vivas and TrueView Video Ads on YouTube. Large publishers, such as the Washington Post, have recently started introducing their own native advertising formats.

  • Open platforms are defined by promoting the same piece of branded content across multiple platforms within native ad formats. Unlike closed platforms, the branded content asset lives outside the platform.

  • Hybrid platforms allow publishers to install a private marketplace, while having the option to allow advertisers from other platforms to bid on the same inventory either through direct sales or programmatically through Real-Time Bidding (RTB).

Industry map description

Native Ad Platforms consists of the following: Exchanges, In-feed, App Integration, and Branded Video.

  1. Exchanges: An exchange is the middle player that connects an advertiser with hundreds or thousands of publishers. These technologies make it possible to do native advertising in a programatic way. They enable matching of supply and demand, and provide reporting tools that make it relatively easy for advertisers and publishers to connect on the exchange. They either work with advertisers directly, or integrate with a Demand-Side-Platform (DSP).

  2. In-Feed: An in-feed native platform specializes in placing the native advertisement straight into the feed of a specific website, although it can be done programmatically to multiple sites. Native ads that are placed in a news feed perform very well, and many brands see a higher conversion rate from them as compared to other Facebook ad units.For example, an American Airlines advertising representative will bring a sponsored video to Connatix (an in feed listed on the Lumascape) and they would in turn specifically place it in the feed of The Guardian or Twitter, but not on other ad places within the site.

  3. App Integration: The app integration platforms are working solely via apps. This type of platform provides a way for its advertisers to integrate mobile services in app form. It enhances their online offerings with mobile commerce options such as in-app purchase and subscriptions. For example, Zumobi ( an app integration platform listed on the Lumascape) would take an ad and place it in the feed of the Facebook app, but not on the desktop site or even the mobile site. This usually falls under the open platform category.

  4. Branded Video: The branded video platforms deal with advertisement videos, although it could be flat out a commercial placed natively in feed, most likely it will take the form of an informative or entertaining video also placed in native form. These platforms produce the videos and place them in the appropriate sites. For example Touchstorm (a branded video platform listed on Lumascape) would create an informational video for e.g. Bank of America and place it in a native unit at MSN.com. This usually falls under the open platform category.