Native Ads vs Display Ads: Understanding the Differences
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Pathlabs Marketing |
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February 28th, 2024 |
Have you ever explored the concepts of native and display ads? If so, it likely became evident that the two definitions vary widely.
For this blog, we're not aiming to provide end-all definitions for these types of ads. Still, we have gathered insights from web research and conversations with Pathlabs experts, enabling us to begin to clarify their differences. Take a look below.
What’s the Main Difference Between Native and Display Ads?
The main difference between native and display ads lies in their appearance and objective within the digital setting where they serve.
For native ads, the ad-serving platforms take the ad content and intentionally integrate it to match the placement location's form, feel, and function.
The goal for native is to have the ad blend in so that users perceive it as a natural part of the surrounding organic content. Even if they know it's an ad, since it is somewhat discrete and the content it links to is relevant, they will still lean in.
In contrast, display ads take a more straightforward approach and appear as distinct banner or box ads meant to stand out from the surrounding organic content where they serve. Display ads cater to many goals, but overall, they intend to grab user attention directly and encourage further engagement.
Key Characteristics of Display Ads
Display ads are the traditional concept of paid ads we've grown accustomed to over the years on webpages and apps, sharing the following characteristics:
They consist of text and image ads in a box or banner shape.
Their file formats can come in JPEG, HTML, or other rich media.
They include a CTA that users can click on and navigate to a landing page for further engagement.
They appear in between the content or at the top, bottom, or sides of a webpage.
They intentionally stand out to be distinct from surrounding organic content.
Below are prime examples of display ads and their many formats.
Above shows examples of display ads appearing between content and within the margins of the webpage.
Popular display ad formats.
Key Characteristics of Native Ads
Native ads are not a singular ad format but a conceptual umbrella encapsulating several ad formats.
According to the Interactive Advertising Bureau, we can consider the following native ads:
In-feed/In-Content Native Ads
These are the most popular native formats. Teams will provide multiple creative elements, including headlines, copy, and other assets. Then, when ads for the campaign serve, these creative elements integrate into the feed or content of the ad placement location.
The organic content surrounding these native in-feed/in-content placements can include articles, posts, products, images, videos, etc.
Upon clicking the native ad, users navigate to a separate website landing page for further engagement.
Below is an example of in-feed/in-content native ads provided by the IAB, particularly on websites accessed by a mobile device.
Recommendation Widgets
These widget blocks appear on webpages, especially news journals and publications, and feature multiple ad tiles that mimic the appearance of organic content.
Teams can serve ads in these tiles; when users click on them, they most often navigate to a separate landing page, including an article or other branded content.
Providers like Taboola and Outbrain specialize in these native formats.
Product Carousels
These are similar to in-feed native ads; however, they primarily feature products and allow the inclusion of multiple photos in the ad.
Services like TripleLift offer these carousel formats, among other native ad formats.
Image from Triplelift.
Why Are They Native?
The three examples above are native formats because they share the core principle of integrating the ad content into the placement location in a manner that blends with the, as many like to say, form, feel, and function of the organic surroundings.
No matter how well the ad blends into the placement location, it must still indicate that it is a paid advertisement using a demarcation like ‘sponsored,’ ‘recommended,’ ‘from our partners,’ or simply, ‘ad.’ This is federally regulated.
Are Paid Social and Paid Search Types of Native Advertising?
Until 2019, the IAB considered paid social and paid search native formats, as these ads integrate and mimic surrounding organic content. For instance, paid social ads blend into the user feed like regular posts on social platforms, while paid search ads incorporate into the top of search engine results pages (SERPs).
If users aren’t discerning, they may perceive these ads as natural elements of the webpage and engage with them – catering to the end goal of native ads.
However, native, paid social, and paid search have divulged into individual channels, as they are too unique in their own rights to fall into the same bucket.
In fact, companies, service providers, and platforms almost always productize these three channels separately nowadays.
“Even using ‘native’ in daily jargon to refer to paid search and social is odd. You would never say, ‘I am running a native campaign’ when referring to paid search ads or an ad campaign on Meta. You would just say paid social or paid search.”
What About Sponsored Content?
According to the IAB, sponsored content is also a form of native advertising.
Here, brands pay publishers to showcase sponsored content on their web pages. The brand crafts this sponsored content in collaboration with the publisher, and then the publisher promotes it like its organic content.
If users click the promotion link to the content, they don’t go to a different website but rather to a hosted page on the publishers’ website dedicated to the sponsored content.
Looking at the example below, Optable worked with Digiday to produce a piece of sponsored content on data privacy in the ad industry. The native ad on the left that promotes the piece appears the same as the organic content, except for the demarcation of ‘sponsored.’ The landing page on the right is just the article with the brand logo for discreteness.
“While the IAB still claims sponsored content to be native advertising, it really faces the same parody as paid search and paid social: it is too unique to fall under the native umbrella perfectly. Even executing a sponsored content placement is starkly different than native campaign execution.
Regardless of the native characteristics it embodies, we generally perceive sponsored content in the digital media industry as its own realm.”
Native Ads v. Display Ads, Which Ad Format Is Better?
There is no winner when comparing native ads versus display ads, despite how often the advertising industry pits these two against each other.
We especially advise against believing, by default, the fallacy that because native ads match the form, feel, and function of their ad placement location, users will automatically be more apt to engage with them.
Many make this claim since display ads stand out in the margins of web pages and can be directly advertorial. In effect, they assume users will develop banner blindness and ignore them. This can be the case, but not always.
In fact, the directness of display ads can be more beneficial, as they grab attention and can even pull users back in with retargeting campaigns. Not all users will respond to this directness, but those who do will likely be the ideal target audience.
Native ads don’t have this directness, and users may overlook them. To make matters worse, not all native formats do a great job of integrating ad content, making the native ad just look like a poorly disguised display ad.
On the other hand, if the native ad does integrate well, users may think it is organic content, click on it, realize it is a native ad, and end up feeling annoyed or tricked.
“This is all to say that teams shouldn’t see display and native as competitors but instead as two different advertising experiences they can strategically use in moderation.”
When to Use Display Ads
Teams should recognize they can use display ads to cater to multiple parts of their sales funnel.
Below is just a handful of the use cases where traditional display ads are valuable.
Serving broadly targeted display ad impressions at a low cost for awareness campaigns
Targeting display ads to a more narrow audience at an increased cost for engagement and conversion campaigns
Retargeting display ads to a first-party audience list for conversion campaigns
When to Use Native Ads
The interesting case for native ads is there is no clear opportunity or stage in the funnel where teams should use them. However, it can be commonplace to execute native campaigns to generate awareness and engagement.
If teams want to explore native ads, they should do so. For instance, a team generating good performance on their display ad campaigns might decide to allocate some budget to native ad testing to see how users respond.
When assessing the success of these native advertising tests, teams should look at the number of impressions and clicks the campaign generates in addition to any other resulting engagements or conversions.
“Teams don’t want to shift all budgets to native ads, thinking they will boost lower funnel performance because of a test campaign that generated lots of clicks.
Some of these clicks may very well come from the aforementioned users who think the native ad is organic content, click on it, and immediately bounce upon realizing it is an ad.”
In Conclusion…
Native and display ads differ based on how they integrate into an ad placement location and the experience they create for the user. While native ads focus on blending in and offering a seamless user experience, display ads prioritize visibility and direct engagement.
For agencies aiming to enhance their proficiency in utilizing either or both ad formats for their clients, partnering with a Media Execution Partner (MEP) can be a game-changer. A MEP provides the expertise and resources needed to elevate media strategies, ensuring successful execution and growth in both display and native advertising realms.
