Twenty-seven years, that’s how long it has been since the very first banner ad was published. The year was 1994, and the banner created for AT&;T looked like this:
Ironically, the very first display ad had some things in common with native ads of the future. In particular, it wasn’t obvious who the advertiser was. Additionally, it didn’t visually reference the advertiser’s brand.
The Rise of Native Advertising
While display ads have been around for close to 30 years, the term “native ads” was first coined in 2011. However, in the past few years, native ads have started to dominate the internet against the competition of their much older brethren, regular ol’ display ads.
A recent study revealed that native ads are viewed 52% more than display advertisements. Additionally, native ads also increase brand recognition in comparison to display ads. Perhaps due to their visibility and recognition, native advertising spend is on the rise. Native ads are projected to hold 74% of online advertising by the end of this year.
These statistics demonstrate a real shift in how businesses are choosing to advertise online. To better understand why this change is happening, let’s take a closer look at both of these types of ads.
What are Display Ads?
Display ads are a type of online advertisement that combines text, images, and a URL that links to a website where a customer can learn more about or buy products. The very first display ads were known as banner ads and often displayed at the top of websites.
As websites became more complex, display ads had a makeover of sorts. Different sizes became available and had video capabilities, interactive features, and pop-up functions. Nowadays, banner ads commonly refer to a specific dimension, 468 x 60 pixels.
Whether due to their age or people’s adept ability at filtering information, display ads commonly have a low click-through-rates of just 0.05% across all formats. While this is abysmal, it’s not a lost cause.
When you consider other metrics, display ads can be influential to brand awareness and purchasing decisions. Although people have become accustomed to filtering out banner ads, they do work. Many marketers continue to use them as part of their online marketing strategy, especially for retargeting purposes.
What are Native Ads?
Native ads appear within the flow of a webpage, blending in rather than trying to stand out on the page. Native ads have an editorial appeal and a softer selling approach. They often appear as sponsored posts inside social media feed or as recommended content by content discovery platforms.
What Makes Native Ads So Different?
For starters, native ads look different. Why? Because they are designed to blend in with the website’s content, with some subtle differences.
The result? Native ads are highly engaging, well-suited for mobile devices, and have a higher click-through rate (CTR) than display ads. Native ads have a click-through rate of 0.38% on mobile and 0.16% on desktop, which are much higher rates than normal display ads.
The Noticeable Differences Between Native and Display Ads
Even though both of these ads are created for similar purposes, we now know they have much different click-through rates, and therefore many subtle differences that drastically change customer engagement. Let’s take a look at a few of the subtle differences between native and display ads.
Native ads have a few distinct differences that help engage users:
- They have a seamless flow with the editorial content on the webpage.
- Their appearance is a soft sell for customers.
- They offer a high CTR, on average 0.2%.
- They are great traffic drivers to an advertiser’s site.
- Offer a better quality of traffic.
- They have a higher cost per click than display ads.
- They are much more effective on mobile than display ads.
Meanwhile, display ads:
- Provide a way to stand out against the content.
- Are considered to be disruptive to customers.
- They have a much lower CTR, on average 0.05%.
- Offer a lower quality of traffic.
- They are cheaper cost per click than native ads.
- Less effective on mobile and desktop than native ads.
Although native ads have a clear edge, it doesn’t mean that display ads don’t have their merits. Native ads and display ads are suitable for different marketing reasons.
Which will it be: Native Ads, Display Ads, or both?
In a society of ad-overload, it’s not surprising that pop-up ads have a 27% approval rating, and 6 out of 10 people say that ads are annoying and intrusive. Perhaps it’s no surprise that native ads, with their seamless design and soft sale tactics, have carved out a big piece of the online marketing pie.
Furthermore, with the advent of programmatic native advertising, native ads are now dominating display ads. However, it’s not all doom and gloom for display ads.
Many businesses are still committing ad spend to display ads, and it’s not because they forgot to change over to native ads. It’s crucial now more than ever to use both native ads and display ads with finesse and intention.
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