What You Need to Know About Native Advertising

Let’s talk about a massive advertising opportunity that has been flying under the radar for a lot of advertisers. It’s not that advertisers have ignored this opportunity, it’s more that they don’t really understand it. The opportunity we’re talking about is native advertising – a misunderstood format with serious potential for brands.

In 2021, U.S. advertisers will spend over $57 billion on native ads, which represents almost two-thirds of all digital display spending. In other words, it’s a pretty big deal. Still, even in the marketing and advertising worlds, not everyone is 100 percent sure what native advertising even means or what types of ads fall under its umbrella.

Some of that uncertainty lies in the nomenclature. When someone says “TV commercial” or “paid search ad” it’s fairly simple to figure out what they mean. But “native advertising” isn’t as intuitive. So, let’s take some time to peel back the layers of this [native advertising] onion and help marketers like you understand how to incorporate native advertising into your Q4 2021 and 2022 media strategy.

What is native advertising?

Let’s start with a softball question: what is native advertising? Here’s a simple definition from our friends at eMarketer:

“Digital display ads that follow the form, feel and function of the content of the media on which they appear, be it a webpage or an app.”

The key to native advertising is its non-disruptive nature. Ads don’t really look like ads; they integrate so smoothly with the page content and design they feel natural or “native.”

What do native ads look like?

Native ads come in several formats and on a variety of channels and platforms. Here’s a look at some of the more popular native ad formats.

In-feed ads

In-feed ads are paid social media posts that display in users’ feeds along with organic posts, usually with the denotation “Promoted” near the top of the post.

Native advertising - In-feed ads

Sponsored content

Sponsored content includes ads for online articles, blog posts and other content pieces that show up in the sponsored content section on publisher sites (typically below an article from that publisher).

Native advertising - Sponsored content

In-app reward videos

In-app reward videos appear in mobile apps and reward users for watching (e.g., Pandora videos that offer extended periods of uninterrupted listening after users watch them).

In app reward videos

How can I use native ads in my digital media strategy?

For creative advertisers, native ads offer plenty of opportunities to drive results throughout the consumer buying journey. The key is focusing on your target audiences’ needs, demonstrating how you provide value to those audiences and building purposeful campaigns. After you lock in those three components, it’s a lot easier to decide which formats to use.

Focusing on your target audience

Before you start building your campaign, make sure you have a clear idea of the types of consumers you’re trying to reach. Conduct in-depth research into your target audience to figure out their needs and wants, what media channels they frequent and how they prefer to interact with brands.

Demonstrating your value

Once you understand your audiences, identify how your products and services address their needs. Your ad messaging should center on that value proposition in a way that resonates with specific consumers.

Building campaigns with a purpose

Ask yourself “what specific results do I want native advertising campaigns to drive for my brand?” Make sure your team understands what you’re trying to accomplish and the metrics you plan to measure success against.

What does the future have in store for native advertising?

2021 is already a huge year for native advertising. Despite slower growth in 2020 due to the pandemic, native ad spending grew by over two billion dollars in 2020 and has increased by over 22 billion since 2018.

U.S. native digital display ad spending


Mobile channels, programmatic platforms and social networks are the main drivers behind this increase. And, since there’s a lot of overlap between the channels, there are plenty of opportunities to run campaigns that incorporate all three.

Native ad formats like video and sponsored articles are becoming more popular as well, which has taken a chunk out of social media’s share of the ad spend. But social ads will still account for around three-quarters of native ad spend in the foreseeable future.

Percentage of native ad spending


There’s also a lot of growth happening in native advertising. Ad tech companies are building out the infrastructure necessary to handle large-scale programmatic native advertising campaigns that have:

  • The ability to test multiple creative messages
  • More sophisticated audience targeting
  • Better tracking and measuring capabilities

For brands, this means the already warm waters of native advertising should heat up even more with increased engagement and higher conversions. If your brand is interested in diving in, contact Mindstream Media Group to learn how our native advertising solutions can help Fast-Forward Your Business.

Editor’s note:  This post was originally published in March 2019 and has been updated for freshness and accuracy.

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The Connected TV Battle – A Song of Traditional and Digital Media

Recently, we kicked off our connected TV series with a look at the convergence of digital and linear models. In this post, we’ll take a deep dive into the digital landscape by looking at the growth of connected TV audiences and the major OTT services vying for viewers’ attention. 

It’s been nearly a fortnight since Game of Thrones reached its highly-anticipated conclusion. Over the last week and a half, millions of viewers watched (and re-watched) the series finale to find out which of Westeros’ finest would end up on top, only to see the hotly-contested, blade-forged metal death chair (SPOILER ALERT!!!) reduced to a puddle of melted steel and broken dreams. In the end, 13.6 million viewers tuned in live to catch the finale, with another 6 million or so streaming the episode or watching it on-demand.

As the final clash for the Iron Throne unfolded, a related battle raged across the digital media realm. Over-the-top (OTT) video providers like Netflix, Hulu and Amazon Prime Video continue to fight for the loyalty of viewers who are increasingly ditching traditional TV providers in favor of internet-connected viewing options.

For marketers, these connected TV audiences represent an increasingly significant opportunity to blend digital’s ad targeting capabilities with traditional TV’s massive reach. To give you a better understanding of the opportunity, here’s a look at the growth of connected TV audiences, the OTT services battling for viewers’ attention (and dollars) and the devices that deliver the content.

Connected TV audiences

Let’s start by clearing up the confusion between connected TV and OTT. Connected TV refers to the devices audiences use to stream video (e.g., a smart TV). OTT services are the apps and providers that deliver the content (e.g., Netflix). To frame up this article, we’ll use connected TV audiences as a catch-all for viewers watching OTT content on internet-connected devices.

Connected TV audiences are comprised of two main groups:

No. 1: Traditional subscribers

Audiences who stream OTT video and also subscribe to traditional TV distributors like:

  • Cable and satellite providers
  • Wireless carriers and fiber operators
  • Major TV broadcast and cable networks
  • Internet Protocol TV (IPTV) providers
No. 2: Cordless viewers

Audiences who don’t have any traditional pay-TV service, comprised of two main groups:

  • Cord-cutters: have had a traditional TV subscription in the past five years
  • Cord-nevers: have not had a traditional TV subscription in the past five years

OTT streaming households by audience type

OTT streaming households by audience type

While traditional TV (i.e., pay TV) viewers still outnumber connected TV viewers roughly 2-to-1, the tides are starting to turn. This trend is significant for brand marketers who will need to reallocate budgets to account for the shift in consumer behavior.

Total pay TV viewers vs connected TV viewers (in millions)

Major OTT players

The growth of connected TV audiences has sparked an arms race among OTT video providers vying for their attention. It seems like a different media company launches a new OTT service every day as existing players jockey for the rights to popular video content and work to develop more original programming. Going back to the GoT analogy, there are three main houses in the race today: Netflix, Hulu and Amazon Prime. Think of them like connected TV’s versions of the Starks, Lannisters and Targaryens.

OTT Providers - Netflix - Hulu - Amazon Prime Video

But, like GoT, the OTT realm has a lot more houses, and these services use a variety of content and delivery models. There are way too many models to cover here, but let’s look at a few of the big ones:

  • Subscription video-on-demand (SVOD) model: OTT services that give users access to a wide range of original and aggregated content for a monthly rate (e.g., Netflix, Hulu, Amazon).
  • Network-based model: SVOD services built around TV and cable networks (e.g., HBO GO/NOW, Showtime Anytime, CBS All Access).
  • Linear OTT model: OTT services that deliver content from multiple TV, cable or satellite channels in real time (e.g., DirecTV Now, Hulu with Live TV, Sling TV).

These services are a mix of subscription- and ad-based models, making some of the services less attractive to marketers. Here’s a look at the major ad-based services across the various models.

OTT providers with advertising

OTT providers with advertising


(Source: eMarketer)

Across content and subscription models, there’s plenty of momentum behind OTT right now. Despite nearing what has to be an audience saturation point, market leader Netflix continues to grow. Other major platforms like Hulu and Amazon Prime Video are still growing as well. On top of that, big names like Disney and Apple have plans to launch their own services in the coming months. For marketers, this means OTT platforms will likely become an even more important channel for reaching consumers in the near future.

Connected TV devices

Perhaps the biggest difference between OTT apps and traditional TV providers is how they deliver content to audiences. With traditional TV, audiences are pretty much tethered to their TV sets and – with the exception of on-demand content – are forced to watch programs live. With OTT services, audiences have a lot more control of where and when they consume content.

Connected TV devices come in all shapes and sizes including smart TVs, gaming consoles, streaming boxes/sticks, etc. (Additionally, viewers can use computers, tablets and phones to stream OTT content.)

OTT streaming households by connected TV device

OTT streaming households by connected TV device

As of last year, streaming boxes and sticks were the most popular connected TV device. The two major players in the category are Roku and Amazon’s Fire TV Stick, both of which experienced solid growth in 2018.

Roku and Amazon Fire TV Stick penetration of U.S. Wi-Fi households

Roku and Amazon Fire TV Stick penetration of U.S. Wi-Fi households

To learn more about connected TV advertising, check out the third installment of this series:

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