Understanding Component Based Display

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Another day, another creative format - or so it seems in the world of digital media. The ad tech landscape is constantly creating new ways for advertisers to engage with audiences. Staying up-to-date with new executions can be difficult, and it’s even harder when vendors incorporate changes without making you fully aware of how those changes affect your campaigns.

One new addition that has developed over the last few years has been component based display, and much like other ad tech jargon, it doesn’t tell you a whole lot about what it is. However, component based display ads are a hot topic in native advertising and has often led to confusion amongst buyers regarding how their creative is being served. So we broke down what “component based display” actually means:

Component based display, Native Display… what’s the difference?

Component based display takes all of the components of a native in-feed native ad: the headline, image, brand logo and call-to-action, stitches all of it together and serves it into a display unit. Rather than serving into an in-feed placement, a component based display ad can be served into almost any standard display placement, including a traditional banner or right rail web page unit.

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When comparing in-feed and component based display, there are important differences that native buyers should be aware of.

  1. Performance

    In an internal Nativo test, we found that in-feed native ads drive 2 times higher click-through-rate (CTR) than component based display ads ran in standard display slots. There are a few reasons for this: in-feed native is built to match the look and feel of the publisher editorial content surrounding it. By contrast, a component based display, while having the same components of an in-feed native ad, are served into display units which are more disruptive to the reader.

  2. Price

    Component based display ads tend to sell at lower CPMs than in-feed native ads. However, a component based display ad is still more expensive than a traditional display ad that is served into the same display placement. For example, if there is a standard 300x250 right rail display unit, it is typically more expensive to run a component based display ad in that unit than a traditional display unit.

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Why are exchanges serving native ads into display units?

There are a few reasons why exchanges started serving component ads into display units. For starters, display units tend to have better viewability than in-feed units which are often below the fold. There’s also a limited amount of in-feed units on a particular page while there can simultaneously be several display ads on that same page, leading to more opportunities for exchanges to scale inventory for campaigns. This lowers the overall cost of native inventory as display is cheaper for advertisers to access than in-feed units.

You may be asking yourself, “So is component based display native or display?” That answer can differ based on who you talk to. Some native exchanges and publishers will tell you that it’s a native ad since it has all the components of a native ad. Others will tell you that only ads served in-feed are truly native ads.

So how do you find out if you are buying component based display inventory? Unfortunately, it’s not that easy. Many native exchanges do not have readily available data regarding the specific inventory type where your ads were placed. As such, it’s important to ask your supply-side vendors these questions to better understand the inventory composition you’re accessing.

I understand supply composition…now what?

At the end of the day, aligning inventory characteristics with campaign goals can take a lot of the guesswork out of determining which formats matter most. For some buyers, looks and performance take a backseat to scaling campaigns and reaching audiences in as many placements as possible. Others are sometimes more concerned with high-performing inventory and ensuring that they reach their audiences using the most seamless formats to connect.

In conclusion, supply transparency is important. Understanding the differences between component based display and in-feed native ads empowers you to ask questions about the inventory you are accessing to ensure it aligns with campaign goals. Next time you’re speaking with a supply vendor, ask if the exchange inventory consists of standard display units (and if yes, then how much of their inventory is display vs. in-feed). This information will give you control to determine the type of inventory you would like to purchase.

To learn more about Nativo’s view on component based display, talk to a Nativo native expert today.