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Both native ads and display ads have something unique to offer us marketers, each with its own unique approach to reaching consumers. But when it comes to achieving the best return on investment (ROI), which one stands out? Is it traditional display advertising or is it native advertising?
What does the data tell us?
In this article, we’ll dive into the key differences between native and display ads, examining their individual strengths and how they each play a role in successful digital marketing campaigns. By the end, you'll understand why native ads are quickly becoming a top choice for brands seeking deeper, more lasting connections with their audience.
READ MORE: What Is Native Advertising? Start With Our Ultimate Guide
Native Advertising a glance
Native advertising has seen impressive growth in recent years, with U.S. marketers spending over $97 billion on native ads in 2023, a figure more than double that of 2019. This sharp increase highlights the relevance of native advertising in today’s digital ecosystem.
Native ads are seamlessly integrated into the content of a platform or website. They blend in with the surrounding editorial or user-generated content, creating a cohesive and non-intrusive experience. The key to native advertising's effectiveness is its subtlety—it delivers relevant promotional content without disrupting the user’s natural flow of engagement.
Some common formats for native ads include:
In-feed ads: Sponsored content that matches the style and tone of social media posts, articles, or other online content.
Content recommendation widgets: “You May Also Like” or “Recommended For You” sections that suggest articles, products, or services.
Promoted listings in e-commerce: Advertisements for products appearing alongside organic search results, creating a seamless shopping experience.
Example of a Native Ad
Imagine you're scrolling through a fashion blog about the latest trends. In the middle of the content, you see an article titled:
"5 Summer Fashion Essentials You Can't Miss This Year"
As you start reading, you realize that the article includes a section with product recommendations subtly woven into the narrative. It feels like a natural part of the blog post, with items linked directly to a shop, offering a seamless experience without being overtly promotional. The tone matches the content of the blog, making the ad blend in with the rest of the information.
READ MORE: NAI's Definition of Native Advertising
What is Display Advertising or Display Ads?
Display ads take a more direct approach. These are the visually striking banner ads, pop-ups, and interstitial ads that stand out from the content. While they capture attention quickly, they can often be seen as disruptive. Display ads are designed to be noticed, using bold graphics, attention-grabbing headlines, and calls to action.
While display ads may not blend in seamlessly with the content, they make up for it with their ability to command attention. They're especially effective for driving brand awareness and generating clicks, thanks to their bold and conspicuous nature.
READ MORE: Check Out the Best Native Advertising Platforms Right Now
Example of a Display Ad
Now imagine you’re browsing another fashion website. As you scroll down the page, you come across a banner ad at the top that reads:
"50% Off Summer Sale! Shop Now!"
This banner features bright, eye-catching graphics with bold colors and a large button that says "Shop Now". The ad stands apart from the content, often flashing or moving, grabbing your attention right away. It’s designed to interrupt your browsing and urge you to click.
Native Ads vs. Display Ads in a Nutshell
While perhaps the biggest difference between native ads vs display ads is whether or not the ad integrates into the surrounding content, there are also other differences that sets native advertising apart from traditional display ads.
1. Integration vs. Disruption
Native Ads: These ads are designed to integrate seamlessly with the content around them, appearing as a natural part of the user experience. Their goal is to engage users without interrupting their browsing habits, making them a subtle but highly effective advertising tool.
Display Ads: Display ads rely on disruption to capture attention. They often appear as separate, distinct elements on a webpage, using flashy visuals to stand out. While they are highly visible, this can also lead to users feeling bombarded by intrusive advertising.
2. Engagement
Native Ads: Native ads are crafted to provide value to the user. Their contextual relevance often leads to higher engagement rates, including increased click-through rates (CTR) and longer time spent interacting with the content.
Display Ads: While display ads aim for immediate visibility, their engagement is often less than that of native ads. Users are more likely to ignore them over time, leading to lower conversion rates.
3. Ad Format Flexibility
Native Ads: Native advertising offers a range of formats, including in-feed ads, content recommendation widgets, and promoted listings. These formats allow advertisers to tailor their approach to the platform and audience, providing a more personalized experience.
Display Ads: Display ads tend to follow standardized formats, such as banners, pop-ups, and interstitials. While these formats can be adapted to different devices and placements, they are often less flexible than native ads in terms of content integration.
4. Contextual Relevance
Native Ads: One of the greatest advantages of native ads is their ability to align with the user’s current interests and browsing behavior. When executed well, they provide relevant content that adds value, enhancing the user experience and fostering stronger brand connections.
Display Ads: Display ads, on the other hand, are less contextual. They primarily rely on targeting users through cookies or behavioral data. However, with privacy changes and the impending death of third-party cookies, the effectiveness of these targeting methods is diminishing.
READ MORE: Native Advertising for Mobile: Formats & Tips for Small Screens
Display Ads or Native Ads – Where Can I Expect the Best ROI?
When marketers decide between native ads and display ads, the primary consideration often revolves around which approach will deliver the best return on investment (ROI). While both types of advertising have their place in digital marketing, numerous studies and industry data suggest that native ads generally provide superior ROI.
Let’s break down the numbers and see exactly why native ads tend to outperform display ads in terms of engagement, customer trust, and long-term success:
Studies Suggest that Native Ads Outperform Display ads
1. Higher Engagement Rates:
Native ads are designed to integrate seamlessly with the surrounding content, making them less intrusive and more natural for users to engage with. According to a study by HubSpot, native ads are 53% more likely to be viewed than display ads. This is due to the subtlety and relevance of native advertising, which matches the tone and style of the platform, providing a more organic experience for the user.
The click-through rate (CTR) for native ads is also significantly higher—native ads are 9 times more likely to be clicked compared to traditional display ads.
2. Longer Interaction Times:
Not only do native ads have higher engagement rates, but users also tend to interact with them for a longer period. Research from Taboola shows that the average user spends 18% more time interacting with native ads compared to display ads. This prolonged interaction is indicative of the increased value and relevance that native ads bring to the user’s experience, often leading to higher engagement levels such as social shares and repeated visits.
3. Enhanced Brand Perception and Trust:
Native ads build trust by blending in with the content and offering valuable, non-disruptive experiences. In fact, 63% of consumers report a positive view of brands that use native advertising. This positive perception is critical for fostering long-term relationships with customers, as it leads to greater brand loyalty and higher chances of conversion.
4. Better Conversion Rates:
Native ads often contribute directly to higher conversions. Data from Nativo shows that native ads can increase purchase intent by up to 18%. This is because they provide content that is highly relevant to the user, which not only sparks interest but also encourages action. As users engage with native ads that provide value—whether through educational articles, product recommendations, or helpful tips—they are more likely to follow through with a purchase or other desired action.
Display Ads: Short-Term Gains but Lower ROI
1. Lower Engagement and CTR:
Display ads have long been a staple in digital advertising, but they tend to struggle with engagement. While they are designed to be eye-catching, display ads often fail to capture sustained user attention.
According to WordStream, the average click-through rate for display ads is only 0.46% across all industries, meaning about 4.6 out of every 1,000 people who see a display ad will click on it. This stark contrast to native ads, which see much higher engagement, highlights the limited interaction that display ads tend to generate. Users often skip over these ads or ignore them altogether, especially when they are not integrated into the content.
2. Ad Fatigue and Banner Blindness:
One of the key challenges with display ads is ad fatigue. As users are exposed to more and more display ads across various websites and platforms, they often become desensitized to them, which leads to banner blindness. In fact, a study by Smart Circle found that 86% of people regularly experience banner blindness, meaning they ignore display ads altogether.
This lack of engagement can significantly reduce the ROI of display ads, particularly in long-term campaigns. As users become accustomed to seeing the same flashy banners, they simply tune them out, leading to a decrease in their effectiveness over time.
3. Intrusiveness and Negative User Experience:
Unlike native ads, which blend seamlessly into the content, display ads often disrupt the user’s experience. Pop-up ads, banner ads, and interstitial ads force the user to take notice, even when they may not want to.
This disruptiveness can result in frustration and a poor user experience, leading to negative perceptions of the brand. According to eMarketer, 40% of users report that they actively avoid ads because they find them intrusive. This kind of disruption can damage customer trust over time and undermine the long-term value of the brand. If users feel annoyed or interrupted, they may develop a negative view of the company, decreasing the likelihood of repeat business.
4. High Costs with Limited Impact:
While display ads can be an affordable option for short-term campaigns, their Cost-per-Thousand Impressions (CPM) typically ranges from $1 to $20 depending on factors such as targeting, ad placement, and the audience’s behavior. Despite the broad reach of display ads, the relatively low engagement rates mean that advertisers often pay a high cost for impressions that don’t lead to conversions.
Standard Cost-per-Click (CPC) for display ads typically ranges from $0.10 to $2.00, depending on the ad format, placement, and targeting specifics. However, due to the low engagement and higher rates of ad blindness, the return on investment can be quite limited. This means that while display ads might generate plenty of impressions, the actual conversions or meaningful interactions tend to be lower, making them a less efficient use of budget in the long run.
As a result, marketers can find themselves spending substantial amounts on display ads without seeing a corresponding increase in customer acquisition or long-term brand loyalty. The cost associated with obtaining meaningful interactions from display ads can quickly outweigh the benefits, especially when compared to the higher engagement rates and lower cost-per-action seen with native ads.
Therefore, for sustained marketing success and better ROI, advertisers might need to reconsider relying too heavily on display ads and explore other advertising options, such as native ads, that offer higher engagement and stronger, more long-term results.
READ MORE: How Much Does Native Ads Really Cost? Find Out in this Article!
So Should I Use Native Ads or Display Ads For my Upcoming Campaign?
Both native advertising and display ads offer unique advantages, and each can serve different purposes depending on your goals. While native ads tend to deliver a higher return on investment (ROI) due to their seamless integration with content and ability to engage users over time, display ads still have their place in certain marketing strategies.
A well-rounded marketing strategy often incorporates both native ads and display ads, leveraging the strengths of each approach to meet specific objectives at different stages of the customer journey. Understanding how to balance both methods can help you connect with your audience more effectively and create campaigns that deliver both short-term impact and long-term growth.
Use Native Ads to Build Long-Term Relationships and Trust
Research shows that native ads are highly effective for building brand trust and credibility over time. Their subtlety and contextual relevance allow them to resonate with users, providing them with valuable content without disrupting their browsing experience.
By using native ads, you can:
Educate Your Audience: Native ads are ideal for providing informative content that helps educate your audience. Whether it's a tutorial, an informative blog post, or a case study, native ads can seamlessly integrate this type of content into the user's flow, enhancing their experience and delivering valuable knowledge without being overly promotional.
Nurture Long-Term Relationships: As native ads build trust with your audience, they create a stronger emotional connection to your brand. This leads to greater customer loyalty and a higher likelihood of repeat engagement or purchases. Native advertising excels in creating long-term relationships with your target audience by focusing on providing real value, making it an excellent choice for brand-building campaigns.
Strengthen Brand Awareness: While native ads are typically associated with deeper engagement, they can also help establish and strengthen brand awareness. By appearing within content that aligns with your target audience’s interests, native ads enhance your brand’s visibility and familiarity, which is crucial for long-term marketing success.
Display Ads Can Help You Drive Immediate Visibility and Conversions
Display ads can still be effective in situations where immediate visibility and quick conversions are critical. Their bold visuals and clear calls to action make them ideal for creating a sense of urgency and driving short-term results.
Here’s when to consider using display ads for your campaign:
Short-Term Campaigns: Display ads are great for limited-time offers, flash sales, or special promotions that require immediate attention. Their attention-grabbing nature makes them well-suited for campaigns that need to stand out and generate quick reactions. Display ads work especially well when you need to capture attention quickly and drive people to take immediate action.
Brand Awareness at Scale: While native ads excel at building lasting relationships, display ads can be highly effective for driving broad brand awareness in a short amount of time. Display ads are particularly useful for reaching large audiences quickly, especially when your goal is to introduce your brand to potential customers who may not yet be familiar with it.
Remarketing and Retargeting: Display ads can be used strategically for remarketing campaigns, targeting users who have previously interacted with your brand but have not yet converted. These ads serve as gentle reminders, bringing users back into your sales funnel and increasing the chances of conversion. Remarketing with display ads helps keep your brand top of mind for potential customers, nudging them closer to making a purchase decision.
Consider Using Both Display Ads and Native Ads
Incorporating both native ads and display ads into your campaigns can provide the best of both worlds. By using native ads for long-term brand building and engagement and display ads for quick results and broader visibility, you can effectively address different stages of the customer journey and marketing funnel.
For instance, native ads can guide customers from awareness to consideration by offering valuable content that aligns with their interests. Once the audience is engaged, display ads can drive them to take the next step, whether that’s signing up for a newsletter, making a purchase, or sharing the content with others.
This approach allows you to reach your audience at different touchpoints—whether they’re just getting familiar with your brand or ready to make a purchase.
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