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It cannot be denied that digital advertising has changed. When it comes to online advertising, display ads, often called banner ads, used to be the most effective. Marketers are now focusing more of their advertising budget on native ads. But how do the two forms vary, and why are native ads so much more successful than display ads?

It’s interesting to remember that the very first internet advertisement didn’t include the advertiser’s logo. This, according to Mashable, is because AT&T hadn’t finished signing off by the time of publication. Ironically, the first display advertisement actually had a trait with the native advertisement of the future: neither the advertiser’s identity nor the advertiser’s brand were immediately apparent.

While display ads have been around for over 20 years, the term ‘native advertising’ was only coined in 2011. Even so, in the past few years, native ads have put up some tough competition, unseating display ads as the leader in online advertising. According to this study, native ads are viewed 52% more than display ads, and they also contribute to much higher ‘brand lift’ than display ads. Native advertising spend is skyrocketing, with native ads holding a 56% share of online advertising in the US in 2016, expected to rise to 74% by 2021.

To understand why the newer native advertising format is overtaking display advertising, let’s take a closer look at both types and the differences between them. It helps to think of native ads vs. display ads as “new school vs. old school.” Display ads are sort of the “old guard” of the internet that’s been around for ages. Most of us know these as banner ads. 

These ads were usually brightly-colored, contained independent branding consistent with the company displayed, and existed in stark contrast to the website they were served on. While they used to be a primary marketing medium, they now tend to be used as part of a larger multi-channel strategy. 

Enter what was once the “new kid on the block”–native advertising. Although new channels like connected TV (CTV) and programmatic audio have since arrived, native is still viewed as a contender to display. What makes native ads effective is the fact that they are intentionally designed to blend seamlessly with the platform where they’re served. Instagram ads look like Instagram posts; Facebook ads look like Facebook posts; TikTok ads look like TikTok videos, and so on.

Here’s a quick comparison of the major ways native and display advertising differ in addition to their look and feel:

Native AdsDisplay Ads
Ads are static with images and text.Display ads include images, text, and can be interactive.
Recommended, or branded content.Ads vary in shape and size to fit in different locations on a web page, including within the content.
Ads blend seamlessly into site content, matching the look, form, and feel of the media format that they appear in.Ads stand out, and it’s clear they are promoting something.
Great solution for educating your audience by conveying information and answers that they might be looking for.Great solution for raising awareness of a brand, product or service.

Many advertisers opt for native vs. display ads to take advantage of the benefits of native ads. However, display ads do still have their place. Knowing when and how to use each format is a critical part of your overall marketing strategy because together, these formats can drive strong performance. 

When Should You Use Display Advertising 

Display advertising is a great channel if you want to increase your campaign reach. You can measure viewability, and the banners can be interactive to stand out. Here are a few scenarios where display advertising is effective:

  • Low brand awareness. If your brand or your client’s brands are currently struggling with brand awareness and are looking to increase visibility, display ads may be just the thing. You’ll be able to get your ad in front of a large audience, and the bold, contrasting nature of the ads will give a strong first impression to target customers.
  • Visual marketing message. Products that are highly visual, like ebooks, infographics, and coupons, can benefit from an effective display ad campaign. Display ads also work well with consumer products that don’t require much additional storytelling.
  • Targeting a niche audience. If the product or service you’re marketing serves a much smaller target audience, display ads can be a perfect solution. Providers of these ads will usually let you segment your audience by interest, which can lower costs and ensure your brand or your client’s brand gets in front of your ideal customers.
  • Retargeting. If users have already interacted with you or your client’s brand in some way, display ads can be a great tool as part of your overall retargeting strategy. Examples would be retargeting an online shopper with an abandoned cart or showing a display ad for a paid eBook to a user who already read one of your free blog posts.

In general, the best way to use display ads is to leverage bold images, colors, and interactive elements to grab a user’s attention quickly and get them to click. If your brand or your client’s brand and messaging can be conveyed quickly and needs extra visibility, you may want to work with display vs. native ads.

What’s the difference between native and display ads? Display ads are the ads that have appeared on most websites since the start of digital advertising.

Read Also: 5 Native Advertising Ideas For Your Business

Banner ads are the most common display ads. These vary in shape and size to fit in different locations on a web page, including within the content. With display ads, it’s clear that they’re promoting something. These ads stand out from the surrounding content, so they’re visible.

There are several differences between native and display ads that show why native ads have become so popular among marketers and web users.

For a start, consumers don’t like banner ads; 80% of them use ad blockers to ensure they don’t see them. Even among those who DON’T use ad blockers, ad blindness means their eyes just skate over those ad banners like they aren’t there. It’s no wonder that display ads don’t get the results they used to. Plus, people hate a hard sell, which is what display ads are all about.

In contrast, native ads take a soft-sell approach. They’re integrated into and relevant to what consumers are already looking at. Web users are more likely to read and click on them than an annoying banner ad. Plus, they can choose whether or not to read, watch or listen to native ad content. When it comes to promoted content, choice beats interruption every time.

It’s also a question of timing. Banner ads interrupt people when they’re in the middle of consuming content online. Nobody likes that; it’s a poor user experience. But native ads, such as recommended content widgets, appear at the point when people are looking for more information. They don’t interrupt the experience.

Native Ads vs Banner Ads Revenue and Traffic

There’s also a huge difference in native ads vs banner ads revenue and performance. Display ads have a low clickthrough rate (CTR) of just 0.05%. In other words, only five out of every 10,000 people who see your ad will click. Meanwhile, the native ad statistics show that the CTR for native ads is as much as eight times higher than for display ads.

Native ads also drive more traffic, as they encourage web users to read or watch content related to what they’re already interested in. Bombfell, for example, got a 960% increase in web traffic when running native ad campaigns.

Types of Display Ads

There are many types of display advertising. Banner ads are an example of display advertising. So are desktop and mobile leaderboard ads. Most ads are rectangular or square in shape, and the content they contain is typically designed to align with that of the host website and the selected audience preferences.

Display advertising campaigns can be run through advertising networks such as Facebook Advertising or Google ads that provide powerful audience targeting features as well as advertising formats (that you can also combine with search ads).

Display ads vary greatly in terms of who they target and how they work. Here’s a breakdown of the different display ad options and what they do.

1. Remarketing ads

Most display ads you see today are remarketing ads, also known as retargeting ads. Thanks to the trend toward ad personalization, retargeting campaigns have become widespread.

According to Accenture Interactive, 91% of consumers prefer to buy from brands that remember their interests and provide offers based on their needs. Retargeting ads do just that, and they’re easy for brands to implement. Here’s how they work.

  • To start, place a small section of code onto your website that collects information about visitors’ browsing behavior, including when they navigate to a category or product page.
  • From the information you collect, develop lists of customer types and what kinds of advertising messages would most likely appeal to them.
  • Then create and place display ads based on the different categories of interest you have observed.

A dynamic remarketing campaign is an effective way to keep your brand present in the minds of shoppers who have already shown interest in what you have to offer.

2. Personalized ads

Google considers remarketing to be a subcategory of personalized advertising, which can be effective when you segment your audience to deliver a better user experience. Personalized ads target consumers based on demographic targeting and the interests they have shown online. You can even create ads that show personalized product recommendations based on a user’s recent interactions with your website.

In addition to remarketing, Google recognizes 4 distinct types of personalized ads. Each incorporates general user behavior and preferences rather than interactions with any particular brand as a targeting option.

  • Affinity targeting

Affinity targeting shows your ads to consumers who have demonstrated an active interest in your market. These affinity groups can be relatively broad—like “car enthusiasts” or “movie lovers”—letting you reach large numbers of people.

  • Custom affinity groups

Smaller custom affinity groups like “long-distance runners” and “orchid growers” let you get more specific about the interests you want to target. Bear in mind that when you use narrower groups, you’ll reach smaller audiences.

  • Custom intent and in-market ads

Custom intent and in-market ads target consumers who are actively searching for products or services like yours. You’ll reach fewer people than with either affinity or custom affinity targeting, but the people who do see your ad will be closer to making a purchase.

  • Similar audience ads

Similar audience ads target people who have interests or characteristics in common with your current visitors. To create lists of new but similar audiences, Google compares the profiles of people on your remarketing lists with those of other users, then identifies commonalities.

3. Contextually targeted ads

Instead of displaying your ads to people based on their user profiles, contextually targeted ads are placed on websites according to certain criteria, including:

  • Your ad’s topic and keywords
  • Your language and location preferences
  • The host website’s overarching theme
  • The browsing histories of the website’s recent visitors

You can let Google make these determinations, or you can take an active role in it yourself through topic targeting.

  • Topic targeting

Google allows you to pick from a list of topics and will match your ad to relevant pages on the Display Network or YouTube. It also lets you specifically exclude topics that are underperforming or unrelated to your message.

Topic targeting is a lot like affinity targeting, except that your ads are matched with websites rather than users.

4. Site-placed ads

If you’d prefer to hand-pick the websites that will host your ad, website placement targeting is your best bet. You can select entire sites or individual pages within sites.

You can even combine placement targeting with contextual targeting. With this approach, you choose a site and let Google select the most relevant pages for your ad.

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