Native Ads vs. Display Ads: What Every Advertiser Needs to Know

Unlock the power of native advertising: a deep dive into seamless integration and enhanced relevance

Introduction

In today's digital age, advertisers are constantly seeking ways to connect with their target audiences and drive engagement, and digital advertising offers many pathways to this goal. Two prominent approaches are native advertising and display advertising. 

Both approaches offer unique advantages and cater to distinct marketing objectives. Native advertising seamlessly integrates into a user's online experience, blending with content organically, while display advertising relies on eye-catching visuals outside of the content experience to capture attention. 

In this article, we’ll dive into the intricacies of these two advertising methods, examining their strengths and weaknesses, and providing insights to help marketers make informed decisions in crafting their digital advertising campaigns. We’ll also discuss why the digital advertising ecosystem is leaning more heavily into native advertising as it moves forward.

What Is a Native Ad?

In 2023, U.S. marketers are expected to spend an impressive $97 billion on native ads, more than double the amount spent as recently as 2019. The growing investment makes sense, given how well aligned native advertising is with the current momentum of the broader digital advertising landscape. 

Native advertising is a strategic digital advertising approach that seeks to seamlessly integrate promotional content into the organic, non-disruptive flow of the platform or website where it appears. Unlike traditional display ads, which are clearly distinguishable from the surrounding content, native ads aim to create a harmonious user experience by blending in with the editorial or user-generated content. The key to successful native advertising lies in its subtlety, as it seeks to engage and educate users without overtly pushing a product or service. It's a form of advertising that prioritizes relevance and authenticity, ultimately fostering stronger connections between brands and their target audiences.

Native advertising comes in many different shapes, all of which are characterized by their ability to blend into the content surrounding them. Some of the most common formats include: 

  • In-feed ads: This format involves placing sponsored content within the natural feed of a platform, such as social media, news websites, or content discovery platforms. For example, on a social media platform like Instagram, an influencer's post featuring a product, with a subtle "Sponsored" tag, is a classic example of in-feed native advertising. These ads often mirror the style and tone of the surrounding content, ensuring they feel like a seamless part of the user's browsing experience.
  • Content recommendation widgets: You've likely seen these widgets at the end of articles or web pages, suggesting "Recommended" or "You May Also Like" articles or products. These widgets are a prime example of native advertising, as they provide users with content or products that align with their interests, offering an organic extension of the user's current engagement.
  • Promoted Listings in E-commerce: On e-commerce platforms like Amazon or Etsy, promoted listings are another form of native advertising. These listings appear alongside organic search results, offering products from advertisers that match the user's query. The ads blend in seamlessly with the platform's overall shopping experience, helping users discover products that are relevant to their interests and search queries.

Native advertising's strength lies in its ability to provide value to users while achieving marketing objectives. By integrating promotional content into the user experience in a way that feels natural and relevant, brands can connect with their audiences more effectively and build trust over time.

How Do Native Ads Differ from Display Ads? 

So, what sets native advertising apart from display advertising? Let's delve into the main differences between native ads and display ads and explore how well they perform in different contexts.

Integration vs. Disruption

Native Ads: Native advertising thrives on its subtlety and integration. These ads seamlessly blend into the content of the platform where they appear, mimicking the style and tone of surrounding articles, videos, or social media feeds. The aim is to provide a non-disruptive user experience, where the promotional content feels like a natural part of the user's journey. By aligning with the user's interests and preferences, native ads can engage audiences more effectively.

Display Ads: Display advertising, in contrast, relies on disruption to capture attention. These ads feature (hopefully) eye-catching visuals, in the form of banners or pop-ups, often distinct from the content they accompany. Display ads aim to stand out and demand attention. While they seek to achieve high visibility, they can also be perceived as intrusive, leading to ad blindness, a situation in which users consciously or unconsciously ignore them.

User Engagement

Native Ads: Native ads are designed to foster engagement through relevance and authenticity. By providing valuable and contextually appropriate content, native ads encourage users to interact, click through, and explore further. They are particularly effective for brand storytelling, educational content, and building brand trust over time. Metrics for measuring engagement include click-through rates (CTR), time spent on content, social shares, and others.

Display Ads: Display ads aim for immediate impact. They often use in-your-face visuals, animations, or interactive elements to grab users' attention. However, the engagement they generate might not always lead to deeper interactions. Metrics for display ads include click-through rates, impressions, and viewability. While they can deliver scale, click and conversion rates are typically very low.

Ad Format Variety

Native Ads: Native advertising offers diverse formats to suit various platforms and content types. Common examples include in-feed ads, content recommendation widgets, sponsored articles, and promoted listings in e-commerce. The flexibility of native ads allows marketers to tailor their approach to specific audience segments and objectives. (For example, Spectrum was able to leverage Nativo’s native advertising platform and native article offering to dramatically increase its job applications and bolster its overall new hiring efforts.)

Display Ads: Display advertising encompasses a range of standardized formats, including banners, pop-ups, and interstitial ads. These formats are suitable for different stages of the buyer's journey and can cater to various creative approaches. But again, they tend to exist outside of the core content of a site or platform.

Performance Metrics

Native Ads: Native advertising success is typically measured by engagement metrics like CTR, social shares, and time spent on content. However, there are also ways to assess their impact on downstream metrics like conversions and ROI. Compared to display ads, native ads are more effective for building brand awareness, perception, trust, and long-term customer relationships. (For example, Nativo recently worked with a leading healthcare brand to leverage native advertising to boost public perception of the brand by 63 percent.) 

Display Ads: Display advertising success is often quantified through impressions, CTR, viewability, and conversion rates. While these ads can achieve scale in terms of impressions, other metrics are typically low and prone to inflation via fraud or accidental clicks.

Contextual Relevance

Native Ads: Native ads thrive on context. Their success hinges on how well they align with the user’s current online experience. When executed effectively, native ads provide value by delivering content or products that are contextually relevant to the user's interests and needs.

Display Ads: Display ads rely less on context and more on audience targeting and visual appeal. Their goal is to interrupt the user's flow and redirect their attention to the ad. Rather than aligning with the user's current context, they have historically relied on third-party cookies to identify and follow audiences around the web. This capability has declined over the years and will soon become virtually irrelevant when Google fully deprecates third-party cookies on Chrome in 2024. Thus, targeting display ads based on the audience will become less prevalent in the future. 

Are Google Ads Also Native Ads?

Native advertising exists across a wide variety of digital platforms and experiences. Google, one of digital advertising’s biggest players, offers a wide array of advertising options, including some native ad options and others that blur the line between display and native. 

Search ads and Promoted Listings that appear at the top of Google search result pages are examples of native ads designed to blend in with and augment the user experience. Likewise, the company’s Discovery Ads are native-looking images ads that appear across Google’s feed placements. However, Google also offers more-traditional interruptive ads via its Display Ads and many of its Video Ad formats. 

Why Is Native Advertising Better Than Display?

These days, native advertising has emerged as a preferred alternative to display advertising for a number of reasons. The trend toward native ads will continue, particularly as we enter a cookieless, privacy-first digital world. Here’s what they can deliver in comparison to display ads.

Seamless Integration and User Experience

Perhaps the most compelling advantage of native advertising is its knack for seamless integration. Native ads blend harmoniously with the content and context of the platform they inhabit, appearing as an organic part of the user's experience. The result is a higher degree of user engagement and receptiveness to the message, as users are less likely to perceive native ads as disruptions.

Display ads, by design, stand out conspicuously from the surrounding content. While they aim to capture attention through visual appeal, they often run the risk of irritating users with their interruptive presence. Ad blindness and ad-blocking tools have become common responses to this intrusiveness, diminishing the effectiveness of display ads.

Enhanced Relevance and Targeting

Native advertising is tailor-made for delivering relevant content to users. Importantly, it does so in an area of the advertising experience that is dramatically underserved: the mid-funnel. The mid-funnel is that ever-critical area of the advertising journey where awareness turns into true consideration, and this is where content is so important. Native ads leverage the context of the platform to provide value and information that align with the user's interests and needs, and they do so at the right time in their customer journey. Through careful targeting and content curation, native ads can feel like personalized recommendations, enhancing their impact and fostering a stronger connection between the brand and the audience. The impact is evident in the fact that native ads outperform display ads on almost every metric, from click-through rate to driving purchase intent

Display ads, on the other hand, tend to appear in less relevant environments and, in many cases involving retargeting, tend to “chase” people around the web. This dated approach to advertising is increasingly being tuned out by audiences, which is why engagements with such ads continue to decline. 

User Trust and Brand Credibility

Native ads prioritize authenticity and value, which inherently builds trust over time. When users encounter native ads that provide informative or entertaining content, they are more likely to perceive the brand as a reliable source of information. This trust is a valuable asset for long-term brand building and customer retention, not to mention driving consideration in the mid-funnel. 

Display ads often struggle to establish trust and credibility due to their intrusive nature and the prevalence of ad fraud in the digital advertising landscape. Users may be skeptical of the content presented in display ads, leading to reduced trust in the brand and its messaging.

Content-Centric Approach

Native advertising places content at the forefront of the user experience. Whether it's an informative article, a sponsored video, or a promoted social media post, native ads prioritize delivering valuable and engaging content. This approach is highly effective for educating, entertaining, or storytelling, and it aligns well with modern consumer preferences. The contextual nature of this alignment is also compatible with a privacy-first future, as it relies on signals from the content on the page versus personal data of the reader to deliver on its relevance. 

Display ads, while they can be visually appealing, often lack the depth and substance that users seek. They may struggle to convey complex messages or engage users in a meaningful way beyond a superficial impression. As users increasingly demand informative and relevant content, display ads fall short of these expectations.

Mobile-Friendly and Responsive

Native advertising formats are inherently responsive and adaptable to various devices and screen sizes. With the growing dominance of mobile devices in online browsing, native ads seamlessly fit into the user's mobile experience, enhancing their effectiveness in reaching this critical audience segment.

Display ads, especially traditional banner ads, can be less mobile-friendly and may not display well on smaller screens. This can result in a suboptimal user experience and reduced engagement on mobile devices.

For brands seeking to build trust, provide valuable content, and engage users in a more meaningful way, native advertising represents the clear choice over display advertising in the ever-evolving landscape of digital marketing.

At Nativo, we help advertisers get a handle on their mid-funnel and transform their content marketing into scalable, measurable native advertising experiences. We do this through proprietary technology and the most innovative native advertising formats available anywhere. Need help harnessing the power of native advertising for your brand? Contact us today.

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