Feb 28 2023
Basis Technologies

What is Native Advertising?


Native advertising: the veritable chameleon of the digital marketing world. It’s come a long way since its inception over a decade ago, evolving into an important strategic component of digital campaigns that can effectively connect brands with their audiences. Marketers find it powerful enough that US native display ad spending is forecast to reach $97.46 billion this year, accounting for nearly two-thirds of total display ad spending. Against all the disruption and recalibration across the digital marketing industry right now, native advertising shines through as a reliable and trusted way for brands to communicate their story. In fact, research shows that whether it’s building brand awareness or developing message association, native advertising is an effective tool in the marketing toolbox.

Here, we define what native advertising is and unpack what it looks like, how it can drive performance, and what the future holds for the medium.

What is Native Advertising?

At its most basic level, native advertising is a form of paid media that mimics the look, feel, and function of its editorial environment. In other words, unlike most standard display and banner ads, it fits in naturally alongside the original content on its host website without disrupting the user’s browsing experience—sometimes to the extent that consumers don’t even register they’re engaging with an ad.

Native advertising is most commonly deployed as paid “in-feed" posts on search engine results pages (SERPs) and on social networks such as Facebook, Twitter, and Instagram (among others). Indeed, seven out of every 10 native display ad dollars are spent on social networks, while, incidentally, 96.0% of all social network ad spending is native. But it also takes other forms: as “recommended content” typically found at the foot of news sites, or as more extravagant “branded content” that consumes entire webpages (and occasionally entire websites). Let’s dig deeper into these different formats:

Native Advertising Formats

In-Feed Native Ads

In-feed native ads copy the layout (arrangement of elements) and the design (font, color, scheme, aesthetics, etc.) of the surrounding platform while simultaneously including visual cues informing the reader that it is a paid ad and not organic content. For instance:

  • “Sponsored” (on Facebook, Instagram, Amazon)
  • “Promoted” (LinkedIn), or “Promoted by” (Pinterest)
  • “Ad” (Google, Gmail, Bing, YouTube)

Historically, when a consumer interacts with an in-feed ad, they will subsequently navigate to the advertiser’s website. But through the rise of technologies and spaces such as social commerce and retail media networks, brands can now enable users to shop and take action directly on many publishers’ sites, putting customers closer to the transaction point. As these systems evolve and mature, in-feed native ads could potentially assume even greater importance.

Content Recommendation Native Ads

Content recommendation ads are delivered via widgets into the main hub of a publisher’s page or underneath or beside individual articles. These native ads don’t necessarily imitate the appearance of the editorial content neighboring them, and the majority will link off-site. Disclosure language for these units can be anything from “You might also like” or “Elsewhere from around the web”, to “You may have missed” or “Recommended for you”. If served via a third party, the technology provider may also include its name or logo to further indicate that content is not produced by the publisher, i.e., “Recommended by Outbrain” or “Recommended by Taboola”.

Branded Content

This type of native advertising goes beyond the initial ad by also incorporating written content and (sometimes elaborate) design work that takes the form of an article, blog post, vlog, infographic, or interactive webpage. This branch of native has grown to be quite lucrative in recent years, with many major news outlets opening their own in-house commercial teams specializing in producing multi-dimensional content on behalf of brands (think T Brand Studio at The New York Times or Brand Studio at The Washington Post).

This content lives on the publisher’s site but will typically feature multiple outbound links directing to the advertiser’s own pages. The key thing to note here is that branded content is created and produced through direct partnerships between an advertiser and a publisher, with their placement guaranteed based on a fixed pre-negotiated (and oftentimes premium) price.

Programmatic Native Advertising

For advertisers looking to scale their campaigns in a cost-effective way, programmatic native advertising offers great opportunities. By automatically serving ads in real-time through a demand side platform (DSP), advertisers can create better, richer, more relevant brand experiences for consumers across screens and devices. Advertisers simply need to provide an image, headline, description, and click-through URL. Then, depending on the form of the organic content on the site where the ad will be shown, the programmatic native platform used by the DSP will determine which of those elements to bring in.

Programmatic is so dominant in the native ecosystem today that it constitutes 96.4% of all native display ad spending—a number that is forecast to grow to 96.9% in 2024. Additionally, 63.1% of all programmatic display ad spending in 2023 will be native, though that share has been dropping for a few years as programmatic increasingly permeates newer, emerging channels such as connected TV (CTV), digital out-of-home (DOOH) and podcasting.

All said: the combination of native and programmatic is powerful, if not ubiquitous.

What Does Native Advertising Look Like?

As adtech becomes more sophisticated, brands can leverage a host of creative native advertising formats to make a more compelling impression on consumers—going even beyond branded content. No longer are marketers restricted to the use of a single, static image: native ads can now incorporate animated GIFs, carousel ads, click-to-watch video ads, instant play video ads, and more. Advertisers can then pick and choose which style(s) best serves their message and potential customers.

For example, B2B brands looking to tell a story around a campaign to drive leads can create a click-to-watch video ad with an embedded CTA. Retail and e-commerce brands can use native carousel ads to showcase a collection of products (or multiple images of one product). And travel and tourism brands can create snazzy photo spreads or cinemagraphs to showcase the allure of a particular destination or travel experience. The possibilities are virtually endless!

Looking Toward the Future

What does the future hold for native advertising? Well, there is definitely change afoot.

The medium is still growing, but its share of total display plateaued in 2020 and 2021—largely because its fortunes are so intrinsically tied to those of social media, and there has been significant upheaval on that front of late. Marketers are increasingly redirecting dollars from social networks into other areas, such as CTV. To put the trend into context: native nonsocial ad spending grew 7.9% in 2022 and is predicted to grow 12.0% in 2023, while native social grew just 3.5% in 2022 and is predicted to grow 8.7% in 2023. Social platforms have dominated the native space for so long due to their audience targeting capabilities and array of available ad formats. Now, though, streaming and mobile channels are opening up new opportunities for native ads—with more inventory available via programmatic—and they are getting better at delivering results for marketers. Put it all together, and social doesn’t dominate native ad spend the way it once did.

What is Native Advertising—Wrapping Up

Native advertising can be a dynamic addition to any marketing mix. By seamlessly and authentically integrating into consumers’ online browsing and shopping experiences, native ads are often able to achieve higher levels of engagement and brand recognition than other channels. From an advertising perspective, the core purpose of running native ads is to blend in with the content a user is already immersed in—it’s critical that the brand story is subtle and slight. There are also exciting innovations across the digital ecosystem that could expand native advertising’s reach and what it looks like.

Want more insights into how native reimagines consumer connection in meaningful and less disruptive ways? Check out our Native Advertising Guide.

Get the Guide