Native advertising is growing rapidly. As more companies are trying their hand at this ad format, the spend allocated to other channels like display will continue to shift towards native advertising. But since your decision has to be based on the ROI (Return on investment), it’s better to determine which channel will be more fruitful for your business.
What is Native Advertising
Advertising that matches the form & function of the platform on which it appears. In other words, when a company has its content featured on a publication website it’s called Native Advertising. Nowadays publication websites offer special “native advertising packages” where they cleverly add a product or two at the end of their content. It provides advertisers with fruitful results since the engagement rate of such ads is much higher than any other ad channel. Along with a higher conversion rate, they also get branding of their product and company. On the other hand, publications are also happy because they get to make decent money without distracting the users with numerous flashy and annoying ads. So overall, a win-win situation for everyone.
What is Display advertising
We all know what it is, but because I defined native advertising earlier, it will be unfair to not describe display ads. So here goes: It comes in numerous forms including banner ads, rich media & more. Display advertising relies on images, audio or video to convey the message to the consumer. Display advertising is widely used for reaching out to customers who are at the beginning or at the middle of the buying funnel. Display ads have evolved into many forms and the format is still growing in every market. It has witnessed a 33.2% hike in Asia, 48.2% in America & 10.4 % in the European market.
Both the channels have a lot to offer but understanding what kind of Return on Investment to expect from these channels will help you in allocating your ad spend wisely.
The ROI of Display Advertising
It has been estimated that display ads will touch a new high of 42.5 billion dollars at the end of 2016 & will escalate further to 60.4 billion by 2017. The reason behind this continued escalation in display ads is its effectiveness in pushing people down the buying funnel.
When customers are just starting their purchase journey, they are totally unaware about your product, company and the offerings. So first you need to create brand awareness and display ads are best suited for this purpose.
Once a customer has an idea about a product or a clearer picture in his mind, he moves further & reaches the middle of the buying funnel. Here, the customers are informed, but they need more specific information about the product before doing business with you.
By focusing your display ads on educating the customers about the company and the product at the middle of the buying funnel, you’re luring the customers to your doorsteps.
And by the time the customers reach the end of the buying funnel, they are fully informed about your products and offerings, but a little confused between you and your competitor. So a little push is required here & display ads, that are specially crafted to target the customers who are at the end of the buying funnel, can work wonders.
Now measure the leads, the cost of generating those leads, branding and the increased revenue for your business. The funnel approach is the most accurate way to measure the actual ROI you will be getting from display ads, since you are generating demand for your product & then moving the searchers down the purchase funnel.
The ROI of Native Advertising
Unlike display ads, native advertisements are best measured by the engagement rate.
Native advertisement first engages the customers by great content and then presents the product at the end of the content, like a dessert. Content for native advertising is created keeping the product and its features in mind, so that it sets a theme from the very start and by the time a customer reaches the end of the content, he assumes that the product is at least worth a shot… well mostly!
It has been proven that native advertising elevates the purchase intent by 18%. It also receives 52% more engagement as compared to banner ads. However, the engagement rate & the number of the people converted will depend on the content & the publisher you choose. A recent analysis report revealed that when Virgin Mobile decided to do native advertising on BuzzFeed, and they received a whopping 1.1 million views.
Right now native advertisement seems to outshine display ads, but the competition is close. So overall, it will be best to use a perfect blend of both display and native ads because it’s always good to experiment with your marketing strategies as it helps you in determining what works best for YOUR BUSINESS.