Native ads are replacing banner ads on mobile — and here’s why

YeahMobi sponsored post for Venture Beat

Screen Shot 2015-07-13 at 9.25.50 AMWhen was the last time you (purposely) tapped an ad on your phone? Probably never. That is the problem with banner ads. At best, mobile users simply ignore them. At worst, consumers get annoyed. In an effort to lift ad performance and offer a better, less disruptive experience, brands and advertisers are increasingly turning to native ads.

Native ads match the natural form and function of whatever platform they appear on. They blend in seamlessly with the host’s existing content, driving higher engagement rates than banner ads. Done right, native ads also appear at the right place and time along the customer journey. Think of a travel app where a native ad appears relevant to a user’s latest vacation planning, or a game app, where a native ad is connected to the game experience. If you’re reading Buzzfeed or the New York Times on mobile, you’ll see native ads appear as sponsored posts. Some of the most successful native ads include promoted Tweets on Twitter and suggested Posts on Facebook.

Due to their high success rate, native ads are becoming the preferred format on mobile. By 2017, more than half of U.S. brand and agency advertisers are expected to increase their mobile native ad budgets by more than 25 percent, according to forecaster eMarketer.

In a January 2015 poll by Ovum for the Interactive Advertising Bureau, U.S. mobile marketers listed mobile native as the second most important development in mobile marketing today. Responsive design, which goes hand-in-hand with native ads in improving the user experience, was listed first.

Some publishers are even going so far as to ban banners. Last year, Yahoo, the Web portal that built its business on banner ads, announced plans to remove banner ads from all of its mobile properties and focus exclusively on native ads. BuzzFeed is also shunning banner ads and sticking to its sponsored content approach on both Web and mobile.

The movement away from banner ads on mobile makes sense when you consider the clear advantages native ads bring to the table.

Native ads provide a better user experience

Banner ads were originally designed for the desktop. They don’t transfer well to mobile, where users prefer apps. On smartphone screens, banner ads appear tiny and the text is often too small to read. Also, because banners simply pop up at a predefined place in an app with no regard for surrounding messages, they tend to interrupt the user experience.

Native ads, on the other hand, match their surrounding content in look, style and feel. They don’t fight for your attention the way banner ads do. And when done right, a native ad contributes to any page it graces by improving the user experience and adding value for consumers.

Native ads offer greater flexibility in positioning and style

Banner ads are sold in fixed rectangular formats. Their placement is equally predictable. In mobile Web sites, banner ads typically appear at the top or bottom of the screen. And because they’re so easy to spot (or ignore), users have developed banner blindness toward them.

Native ads, on the other hand, offer brands much more flexibility: more real estate allowing for a full editorial or an interactive video, for example. The placement options are practically limitless. You can also apply native ads to the myriad of apps available, not just social feeds or news apps. And because native ad formats can be delivered via API or SDK integration from companies like YeahMobi, an app developer can create their own customized experience to best monetize traffic in their app.

Native ads receive higher CTRs

Another reason brands and advertisers love native ads is because native ads outperform banner ads.

A study by the Online Publisher’s Association features several case studies, including one from Edmunds, where native ads on mobile experienced CTRs 406 percent higher than conventional banner ads.

Good evidence also suggests many of the clicks from banner ads are accidental as opposed to genuine interest. Some estimates put the number of ‘fat finger’ banner clicks as high as 50 percent — hardly a surprise considering the touch screen nature of most smartphones. And although technically not a banner, the same is true of full-screen interstitials, or popups, on desktop. Users intending to close the intrusive ads, often click on them accidently.

Native ads capture more eye attention

CTRs only tell part of the story. Native ads in digital news feeds also receive significantly more visual attention from consumers than banner ads do, according to a recent report from Sharethrough and Nielsen.

What’s more, because native ads provide more engaging content, people spend more time reading them. According to a report by Mobile Marketing, native ads in apps and on mobile sites typically see two to five times greater engagement than traditional banner ads do.

Native ads are the wave of the future of advertising. And the emergence of programmatic mobile ad platforms like YeahMobi makes them easy to access and optimize for advertisers.

As consumers spend more time on mobile devices, they have less time for ads that are outofsync with what they are doing. And as brands are learning, mobile doesn’t have the bandwidth for bad customer experiences.