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The rise of direct response native advertising

The rise of direct response native advertising Melody Dekel

In a talk given at the Winter Science Week, Bruno Fernandez-Ruiz, senior fellow at Yahoo, explained that advertisement performance goals can be divided into three main categories:

  • Awareness: The typical example is traditional brand marketing, both online and offline, in which ROI is difficult to measure.

  • Engagement and consideration: A grey zone between brand advertising and direct response, which can influence offline purchases, but is still not directly linked to it. Usually this type of advertising is associated with native advertising and social media.

  • Action and retention: Conversions exist with a clear revenue attribution. Usually this type of advertising is associated with direct response campaigns and search marketing.

Since native advertising has evolved as an answer to the display advertising challenges (e.g., "banner blindness" and disruptive experiences), its main focus was to provide value to the user, in a way that becomes integral to the content consumption experience. It is therefore not surprising that native advertising is usually categorized in the middle tier -- "Engagement and consideration." Native ads, especially content recommendation ads, offer in-depth engagement with the users, they can educate them on the relevant subject matters, provide important tips, cover relevant trends, and so on.

Although this type of engagement can substantially influence a buying decision and increase brand awareness, native ads are usually not designed and measured as direct response campaigns. But with substantially higher CTR rates for native ads compared to display advertising, the possibility of leveraging this form of advertising for direct response campaigns is extremely attractive for advertisers and most other players in the ad-tech ecosystem.

Mixing native advertising with direct response

One might say that native advertising and direct response campaigns cannot mix. For most people the two seem inherently contradictive -- while native advertising focuses primarily on bringing value to the user, direct response campaigns optimize for conversions (e.g., purchases, sign ups, etc.). Don't get me wrong. This doesn't mean that direct campaigns do not bring value to users; it means that the primary focus and optimization is the conversion itself.

In order to understand the differences and what can be done to mix the two, let's consider the following examples:

Ads on the publisher's site
The following is an example of a classic brand awareness native ad:

And this is an example of a direct response native ad:

Can you spot the difference? Well, that's because there is usually no major difference between direct response native ads and the more "brand awareness" ads as they appear on the publisher's site (before they are clicked). In both cases the ads, which appear on the publisher's page, should be intriguing, engaging, and extremely relevant to the user and/or to the context of the page. In these examples both ads promise knowledge/tips in a form that seems to be (before clicking) a content article. One offers advice that is important when starting a company, while the other offers advice on how to easily remove wrinkles.

Landing page
The landing page or native ad content is where the differences become more apparent. Let's look at the examples of the landing pages of the ads mentioned above:

The "brand awareness" landing page (after clicking on the ad) looks like this:

The landing page is a blog post from the advertiser's own blog. (Please note that I have trimmed the length of the post, but the original includes 5 tips.) The blog post provides value to the user by centralizing some important tips to entrepreneurs. The post itself does not even promote the advertiser's service, but rather "hints" that it is important to provide good customer service, which is somewhat related to the advertiser's business.

Whoever is not familiar with native advertising may question the value of this type of ad to the advertiser. However, as an "engagement and consideration" advertisement, the fact that the user is exposed to valuable and relevant tips coming from the advertiser and its brand, may lead to future consideration and brand awareness. Of course, some advertisers complement the landing page with retargeting campaigns, by placing a remarketing code on their blog's page. This type of complementary tactic will eventually try to promote the conversion (now that users were already exposed and developed positive awareness to the advertiser's brand).

The "direct response" landing page (after clicking on the ad) looks like this:

In this case, the content of the article is much more promotional, promoting a specific skin treatment. (Please note that I have trimmed the length of the post.) Although it may seem like editorial content, it makes a strong case in favor of the advertiser's products, while providing a lot of examples and testimonials to convince the reader.

In addition, direct response landing pages will always include a call-to-action, which may not be necessarily the case in brand awareness campaigns. In our example, the call-to-action is very large and comes as a natural continuation of the story -- offers the treatment that has been discussed in the article. Call-to-actions may be very different from this example, such as just a button, placed at the beginning of the article, etc. However, one thing is for certain, the entire page is designed and optimized to drive the traffic through the call-to-action button.

Does this mean that this type of advertising is "bad" or "misleading"?

Certainly not. I think the combination of native advertising and direct response campaigns provides more depth and promotes informed decisions. It is an opportunity to learn more about the promoted product/service and be able to engage with the content in a new way. If advertisers offer value to the readers, they can leverage this form of advertising to make a strong case that will benefit their brands and promote conversions. 

Relevancy adds value to users

One of the most important ways to add value to users, especially in direct response campaigns, is through relevancy. After all, there is no point in building a direct response landing page with important tips or engaging content if it is not relevant to the reader.

There are several types of matching technologies. Some native advertising networks/platforms provide match ads according to the context of the content on the publisher's page (where the ad appears). Others, like my company, use advanced matching technologies to match the ads to the content as well as the individual user's interests and preferences (learned typically by assessing users' behavior during content consumption). This means that the ad selection process is optimized to match multiple criteria, both the content of the page and the individual user, enabling wider utilization of the ads inventory, while remaining extremely relevant.    

As native advertising evolves, it will most likely have a wide variety of flavors and shapes. The advertising format that was once non-promotional, and located between the "Awareness" and the "Engagement and consideration" spectrum, is making visible moves towards "Action and Rretention." By looking at the native ads appearing on a wide variety of publishers' sites, it is clear that direct response native ads are becoming very common.  

Melody Dekel is director of marketing and business development at my6sense.

On Twitter? Follow iMedia at @iMediaTweet.

Melody is responsible for all Marketing and Business Development initiatives. She received a BA in Psychology and a BA in Sociology and Industrial Psychology, magna cum laude from Columbia University of New York. She brings over 10 years of business...

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to leave comments.

Commenter: Mani Gandham

2015, May 22

While native can be used with DR, it's a far better fit for sponsored content, especially through high-end integrations that deliver real branding and awareness.

The ad units highlighted here are nothing but display units just called "native" and there are dozens of providers using these "recommended links" widgets. CPC pricing with clickbait headlines and risque images don't require any relevancy because vendors can just optimize by clicks instead.

All these widgets are designed for traffic and clicks, the exact opposite of brand awareness and attention. By driving to a landing page, it's the same experience as click on a display banner and it's reflected in the high bounce rates, low quality traffic and general lack of consumer satisfaction.

There are much better alternatives out there, usually categorized as in-feed or content syndication companies that can do a much better job of actually delivering real sponsored content directly to the consumer. This generates far more brand lift and with the proper tracking, can show real ROI for marketers.

Disclaimer: I'm the founder/CEO of Instinctive - a premium content syndication platform that powers content marketing for the Fortune 500 - see https://instinctive.io for more info.