Maybe you heard Native Advertising already in the past, but you are curious… What is Native Advertising?
Native Advertising are ads that don’t look like ads. In other words, ads that are designed to match the content form of a media page. Usually, they can be found when scrolling down to the very end of news pages.
With Native Advertising, paid articles are mixed in between regular editorial content on the website. The key benefit that differentiates them from regular ads: It enables a seamless integration into the user’s experience without disrupting them.
Many people believe Native Advertising is a new phenomenon. Yet, the principle has been around much longer. In the 1920s, companies first started to sponsor radio broadcasters, which would include their ads in the regular program.
Although practised for years, the official term “Native Advertising” was only first announced in 2011 at a Marketing Conference, invented by Fred Wilson. Since then, it has grown and started to become a blue ocean market for businesses.
There are three reasons why businesses decide to use native advertising:
In general, there are different target audiences for each ad platform – which is nothing new. While Gen Z can be found mostly on TikTok, YouTube or Facebook typically also target older audiences. But: No matter which platform you choose, you can always only reach a segmented audience at once. With advertising via Native Advertising platforms, an incredibly broad audience can be attracted because of its flexible nature and because of its independent character.
Imagine, you’ve figured out what works in your campaign and what doesn’t. Now you plan on increasing your ad budget and want to increase ads on Facebook – only to find out that there’s no more ad slots available. Traditional ad platforms such as Facebook or Instagram will only allow a certain number of ads to be displayed at a time to keep up the optimum experience for the user.
Now, this problem worsens if there’s high demand for ad space. During hot times, such as Black Friday or Christmas, the ad space is tight – and at some point scaling is impossible even if you have thousands of ad budget ready to spend.
Scaling can also go wrong (you lose money) when the cost per sale goes up with an increasing budget, as it is often the case with Facebook or Instagram.
And this is the catch: People assume, when investing more money, it brings more ad revenue – but with Facebook, there is a cap. This is because the CPS or CPL will automatically go up, when you increase the ad budget. And, at this point, the potential is exhausted.
To illustrate, here’s an example:
A shop operator already invests €1.000 a day in Facebook advertising. Because business is strong, margins are good, and inventory is high, the founding team decides to scale. So the daily budget of €1.000 in the Facebook ad manager changes to €3.000.
So far, the CPA, i.e. the price per unit sold, was €23.00. Literally overnight, the price for a sale has risen to €44.80 – almost twice as much. What has changed? Daily budget only. Everything else has stayed exactly the same. With the increased daily budget, Facebook was simply unable to keep the value constant.
Facebook for example is known for changing ad guidelines quickly and often. Volatility is something many advertisers struggle with when advertising. It makes planning more difficult and measurable results can’t be foreseen.
In contrast, with Native Advertising, there are less limits as to when and how you can advertise. It makes it easier for businesses to plan the ad campaign and to make the most out of the ad budget.
First things first: The structure of a native ad is fundamentally different from an ad on YouTube or Facebook. With Native Advertising, a top-of-funnel approach first attracts attention and then informs.
Native ads start at the top of the funnel. After clicking on an ad, the potential customer sees a special landing page camouflaged in the design of a news page. Such pages are also often called “advertorials”.
The saved customer is then converted into a buying customer within a short time. A saved audience means someone who isn’t interested in the product at first. They are not willing to click, let alone are ready to leave their contact info and spend money.
Now it is possible to “warm up” the user, by leading them through a specifically designed process. With each element of the article, from a catchy headline to the CTA working with FOMO, they are being left wanting more.
This is a typical Native Advertising Campaign Structure
This proven step-by-step recipe for making the user hot for a specific product or service doesn’t work with your typical ad. With both ad forms, non-native or native, the user is being led to the landing page – the difference is in willingness to leave their contact information.
With Native Advertising, you not only reach potential customers who are ready to sign up, but you have the ability to make them ready.
Concerning the landing page, it doesn’t matter whether they’re leaving their contacts for insuring a family member or for ordering a body oil – the actual form can vary depending on the product or service offered. Anything’s possible here. Crucial, however, is to have an attractive offer, since it should be obvious why someone would want to buy.
Overall, the rule of thumb is: The more suitable the product is for the masses, the better the marketing via native advertising platforms works.
In addition to the purely technical structure, it is about activating the right psychological triggers. So, it's not enough to just quickly write an advertising text and then hope that it will already lead to a conversion to a purchase. Similar to a Swiss watch, several cogs must mesh perfectly so that the landing page converts accordingly.
As mentioned, with Native Advertising platforms, a wide audience can be reached. However, native advertising doesn’t attract the average TikTok user. Instead, people above the age of 25 until old age are drawn to native ads. Businesses use that as a benefit, since older people are more likely to spend money on their services, whereas someone without a stable stream of income isn’t.
Coming from the landing page, the user has the direct opportunity to buy the product on an alleged offer page. If at the same time, both the right choice of words and the perfect blend of needs, testimonials and fear-of-missing-out (FOMO) have been made on the landing page, the profitable purchase in the online shop will succeed directly.
The advertisement should be convincing without being too sensational (keyword: clickbait). Only if the person exposed to the ad is qualified to buy it, they should be clicking on it.
The product can be explained in detail here. The features are presented as effective benefits for the potential customer. The user thus receives all the information relevant to a purchase decision.
The moment of truth. The actual purchase takes place here on the offer page. Therefore, it is important to use processes that have been proven to work and not try anything fancy to ensure the conversion.
Overall, native ads work best for leads or sales generation. If as a business you need the contact information of a potential customer, and have the end goal of calling them or being able to be called. Or, if you’re an e-commerce owner and want to sell something online directly via an order form, for example.
Other ad areas, such as branding, do not work as well, since it is harder to measure than leads or sales.
It is important to notice that native ads are not equally suitable for every type of product. Due to the fact that there is no functioning targeting in German-speaking countries, the product has to be suitable for a large part of the population. For a specific niche product with a small number of users, native ads aren’t the best choice.
Simply put: The broader the product’s target group is, the better the performance-marketing works when using native advertising.
Generally speaking, it is a bidding-model. There’s a market and there’s demand. At the end of the day, you shouldn’t ask yourself the question: “what’s my cost per sale?” but instead ask “what’s my return on investment?” or “what’s the return on ad spend?”.
Only looking at the cost of a single click doesn’t make sense here. The click might be cheaper on Facebook or Instagram than via Native Advertising platforms yet the ROI turns out to be lower than expected. Here it’s important to look at the whole picture. All in all, spending money on ads is only then rewarding, if the ROI actually is higher than your CPS.
With ads on Google & Co., you’ll find a largely automated landscape, including algorithms and smart programming. With Native Advertising, on the other hand, it is a lot of manual work. At native advertising agencies, there’s a team behind the whole process. Bids are being adjusted a few times a day every day and altered depending on the outcome.
Because of this manual nature, results are transparent and predictable. Any change can be traced back and reasoned immediately. But this only works if you have the experience and knowledge to interpret and use the outcome accordingly. Otherwise, it’s easy to burn thousands of Euros in a blink instead of getting a good return on your investment.
Marcel Sattler, Founder of PurpleBlack, Native Advertising Agency
We at PurpleBlack have invested Millions of Euros in Native advertising. Some days, we spend over 50,000 Euros in just one native advertising campaign, generating thousands of leads or sales for our clients. We can calculate the potential as well as the risk you would run with native advertising and then see whether it’s something that can be truly rewarding for your business.