I was in the audience for a panel on the future of native ads a few weeks ago. It didn't take long for the panel, which was made up of ad tech executives, to find the first point to disagree on: What's the definition of a 'native ad'. After a little bickering, the moderator was able to get the group to agree on something like this:

Native ads are paid media units that take on the form of the environment they are displayed in.

That worked for me.

More debate followed about "what was the first example of a native ad?" and "do we need to consider print or just digital when thinking native?" For the context of this post, let's consider only online digital native ads while we dive into some examples to shed light on those questions. Along the way we will uncover some of the sources of controversy that drive the debates around native ad formats.

Google AdWords: the world's most successful native ad. Many people will agree that the biggest reason Google was successful in the early days of search was how well they made money at it. The beauty of AdWords is that it makes money for Google as it balances the needs of the advertiser with those of the user. The AdWords search result is relevant or it wouldn't show. It's easy for the user to understand what happens when they interact with the ad (taking you to a website when clicked). And advertisers are motivated to improve the text (the creative part) since it's bought in a marketplace.

At the risk of being overly meta with this example… here's a look at an AdWords ad for AdWords itself:

The obvious characteristic about the first result (the paid result) is that it's only slightly different than the second result (the natural result). It's marked as an "Ad" by showing the yellow symbol next to the URL of the result. You will see this in almost all types of native ads but often they are labeled as "promoted" or "sponsored" rather than "ad". Also, the mark often appears as subtle text rather than a bold yellow marker like what's shown in the Google example above.

Facebook, Twitter, and LinkedIn Ads: social sells native. We've heard lots of recent talk on native ads and it's clearly not because of Google AdWords since it's not something new. I think much of the interest is due to the native formats across websites. But before we dig in there, I'd like to talk about what the big social networks are doing with native. I think their use of it has driven much of the innovation and motivation in the industry to work on native.

All three of these social giants sell many forms of paid media, ranging from direct sold banners to operating their own ad exchanges. But when we think of ads on Twitter, we think of promoted tweets. On Facebook, we think of sponsored posts. And on LinkedIn, it's sponsored updates.

Looking at the LinkedIn ad below, it is easy to spot how similar it is to the Google ad we first examined.

The similarities are:

  • Both ads look like the content around them. LinkedIn ads look like the other updates in my stream just as Google ads look like the natural results I searched for.
  • Both ads are marked as "paid for" in some way. Google uses the yellow "Ad" mark and LinkedIn displays the word "Sponsored" to distinguish it from other content.
  • Both ads "act" like the organic content around them. We discussed how the Google search takes you to a website when you click on it exactly as the organic result does. In the case of LinkedIn, users can take action (follow, like, comment, and share) on the ad just as they can with any other shared content.

The last point is key. The ad conforms to the expectations users have of the non-promoted content around it. If it didn't, users would quickly learn there is no value in the native ad. But since there is value, just like in the Google ad, this new form of paid media is really taking off.

Think about that for a minute. This suggests that Google is the successful company it is today largely because they make money driving highly functional ad units to their users. These ad units simultaneously maximize value for both advertisers and users. Facebook, Twitter, and LinkedIn are doing the same and seeing great success at it, of course.

Native on the Web: the controversy begins. In the above I stuck to simple examples but things get blurrier when you apply the concepts of native ads to the web at large. This shows up when you look at what web publishers are doing today with their own promoted posts. Let's take the example of a promoted article for a handbag on a fashion website. That article would fit our definition for a native ad: 1. It looks like the content around it 2. It is likely marked as "sponsored" 3. It acts just like other content since it's a webpage and all articles on the website are just webpages.

Website promoted articles are clearly carried over from offline full-bleed magazine ads and promoted articles which have been helping fund publishers for years. The difference with online is that publishers need to be creative in how they drive traffic to the paid media. Users aren't running into the ads as they do offline while flipping through pages of a magazine. So they integrate the paid media into their site navigation and search.

Navigation and search results are where things get a little harder to define what's going on. Is the native ad the destination, the promoted navigation element, or both? Here's an example in BuzzFeed:

The destination of the link of the target ad is a BuzzFeed page that is a promoted feed of images for Target. 

Programmatic Native: turning up the volume for native ad buying. Late last year, Twitter's MoPub unveiled their plans to offer programmatic buying of native ad inventory. Others were already hard at work at building native exchanges, like NaMo media, who was recently acquired by Twitter. Here's an image pulled from their release ("Introducing Native Ads"), which captures how native ads look across the numerous apps in their exchange:

You will notice the common markers of native ads we've discussed above including the “sponsored” mark and the functional integrations.

This opens up native ad buying and selling to every app (and site over other exchanges). We should expect to see native ad formats growing in number and with it more and more native ads appearing. Why? If Google, Facebook, LinkedIn, and Twitter have all chosen native formats to sell paid media, we can conclude that it works well. And now exchanges like MoPub make buying and selling native scale for advertisers and publishers.  

Expect nothing but growth for native ads. All the parts are in place for advertisers and publishers to create new innovative solutions at scale. 

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