February 3, 2015

Native Ads: Different Classes for Different Needs

The usage of native ads has been a heated topic since it burst onto the scene in the last few years. From extensive efforts to simply define the term to contemplation on whether or not it will save online advertising from self destructing, there is no shortage of discussion on the topic. Interestingly, despite the extensive exploration of the topic, most of the conversation is centered on a particular type of native advertising execution: the advertorial or sponsored article. Made (in)famous by the Scientology ad in the Atlantic, this execution is typically a full-page, completely customized unit in which the content has been generated specifically for the ad. Let’s take a look at an example from WebMd, sponsored by Merck:

Native Ads Web MD

WebMD worked closely with Merck to generate content that Merck wants to be associated with, thereby increasing readers’ awareness of the Merck brand in a specific context. WebMD’s users benefit from this content and it serves them much better than a standard display ad. This is the win-win-win of native advertising: users want content, not ads, and respond positively to it, advertisers win because users are responding more positively, and publishers win because their users and advertisers are both happy.

There is no doubt that this type of execution is the hallmark of native advertising. However, the active industry conversation is failing to focus enough on an equally interesting and possibly even more promising native advertising execution: the granular content or product placement execution. As opposed to the custom, full-page, created-just-for-this executions like the one above, granular content native ads incorporate small and well-structured pieces of advertiser content into the publisher’s offering. Usually this content is a product or an offer and it is an offer of the same type as whatever is on the publisher’s page. For example, at ironSource Display we worked with Download.com to enable software developers to advertise their applications as sponsored results within the organic results for software applications. So, if you search for “photo editor” you’ll get search results that look like this:

Native Ads--Photo Editor

The first results are sponsored and, true to native advertising, they look and feel just like the organic results below them (with the exception that they’re marked as sponsored matches). This execution meets many of the definitions of native advertising that are being offered, but is special in that it is granular in nature.

These units have the potential to service a completely different segment of the market – the performance advertiser and publishers that have granular content. As opposed to full-page advertorials, granular content ads can help advertisers sell specific products while helping publishers expand their own offering. Consider Amazon’s take on this type of execution:

Native Ads--Strollers

The first row of products are products that Amazon sells itself. The second row of products are just ads for products on external websites placed by Amazon’s advertisers. With this level of integration, advertisers can sell their products directly within a publisher’s website – and that’s an entirely different experience and serves an entirely different purpose than an advertorial. Both have their place, but the latter has captured almost all of the attention in recent conversations.

So why is this type of execution missing from the conversation? Simply put, most publishers don’t have the tools necessary to enable these types of executions and so they are not yet trying them out. In order to offer advertisers the ability to place granular content directly into their site, publishers would need their engineering team (if they have one) to build a platform for advertisers to upload assets, bid on placements, track results, and much more. And then each publisher would have to repeat the same work. We witnessed this need amongst publishers and have built the ironSource Display ad server to solve this exact problem – empowering publishers to offer native advertising as a core offering in their package, without having to do extensive development work. It’s early days, but it is exciting and the results speak for themselves.

As the native advertising space develops, there will undoubtedly be more attention paid to all the various types of executions available. Different publishers and advertisers have different needs, and this space is forming before our eyes. What do you think about these types of granular content and product placement executions? Share your thoughts with us in the comments.

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