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The digital advertising landscape has faced some drastic changes in the past decade. With 763.5 million people worldwide using ad blockers to avoid traditional display advertising, marketers have shifted their budgets to new advertising channels.
One such channel is native advertising, which has allowed publishers to continue to monetize their audiences while offering a pleasant reading experience. A segment that has enjoyed the benefits from native advertising is the e-commerce industry, which has seen incredible results from this relatively obscure channel.
In this article, we’ll break down how native advertising works and the exact steps to get started with your first campaign to help your e-commerce business grow.
What Is Native Advertising?
Native advertising is a type of non-disruptive digital advertising in which the ad seamlessly blends in with the design of the web page it is published on.
Unlike display or banner ads, consumers usually can’t distinguish native ads from the content, even when they are labeled as promoted, sponsored…
…or recommended by the native advertising network:
Compared to display ads, many studies have confirmed that native ads receive a much higher click-through rate (CTR) than the former, even though they can’t agree on the exact percentage (this is mostly due to the differences in the samples, which vary by industry, country and publishers used):
- An AppNexus study found that native ads received 0.80% CTR, while display ads received 0.09% CTR. That means native ads have 8.8X higher CTRs than display ads:
- An IAB report found that the average native ad CTR sits at 0.30%, as compared to a 0.12% CTR for traditional display ads.
- A Smart Insights report from Google’s display network found an average of 0.05% CTR. That means native ads' CTRs are 6X higher than display ads' CTR, a smaller difference than the previous report.
In any case, advertisers have started to move their budgets aggressively to the native advertising landscape. Right before the COVID-19 pandemic, the U.S. native advertising market was worth more than $52 billion:
For e-commerce businesses, native ads have not disappointed. One such case comes from Pandora, a major jewelry retailer, which saw a conversion rate increase of 130% after running a native ads campaign:
In the next section, we will look at all the steps you need to take to start a native advertising campaign for your e-commerce store.
How to Create a Native Advertising Campaign for Ecommerce
Before we get started, we need to set your expectations correctly. Native ads can work, but only if:
- You already have a working product: For our purpose, you should pick a product that has already worked in other paid ads networks (such as Facebook) or channels (such as email). If you don’t, then pick the most profitable and highest-converting product you have.
- You already have a proven product page: You should have optimized your product page for conversions. Since native ads campaigns almost always target cold audiences, many native advertisers tend to use “advertorials,” a mix of a landing page with a sales letter (here are a few examples). However, we will assume that this isn’t the case, as building a high-converting advertorial is a project of its own. At the very least, you should be certain that the product page you use already converts in other channels.
With all this said, let’s get started!
Step #1: Define Your Budget
There’s no need to clarify that the goal of any paid ads campaign is to generate sales. However, your goal in the first few weeks of running your campaigns is to gather data to see if your setup is correct or if your funnel works. That means you will lose money at first.
In fact, you should be happy to see an ROI of -50% in the first few days or weeks, as the ad networks will show your ads in the wrong placements (i.e., publishers) and the wrong widgets (i.e., exact page location).
Imagine that the ad network in which you are running your native advertising campaign decides to show the vegan protein powder you are promoting in a Food52 post about the best meat cuts to grill. Huge facepalm, I know, but that’s what’s going to happen to one extent or another. (In the last step where we talk about optimization, we’ll see what you can do about this issue. For now, you must understand that this problem will be the cause of your initial losses.)
Now, how do you go about determining your budget? Since we said that your initial goal is to gather data, you want to start by defining the minimum number of conversions.
Marketers always discuss the minimum amount of conversions to shoot for. Some like to get at least 100 conversions, while others prefer 20 or less. The more conversions you need, the more data you will need to gather, and thus the more expensive your campaign will be.
For simplicity’s sake, we’ll suggest that you get at least 20 conversions. Take your product’s price and multiply it by the number of conversions to get a rough budget estimation. For a $40 product, your initial testing budget will be $800 ($40 x 20 conversions = $800). Once you start optimizing your campaign, you will have to increase your budget to scale the best-performing placements and widgets.
Two factors that also influence your budget are your location and the native network. The United States is the most expensive market to run native ads on; if that's your case, you may have to increase your budget considerably to generate the conversions you defined. Most other markets aren't as expensive, so your pre-defined budget won't have to adjust as much.
The top native networks like Outbrain and Taboola run traffic on the largest and most prestigious sites in the world, which will lead to higher costs than the ones from smaller ones such as MGID and Revcontent. You will have to adapt your budget to factor in this point when you get to step #3.
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Step #2: Research Your Competitors
Marketers always like to research their competitors for their campaigns. This is especially important for native advertising, as you will be able to uncover proven angles and creatives to try in your first campaign.
There are three tools you can use to spy on your competitors:
Whatever tool you decide to use, you want to look for:
- Ad creatives: What images are most popular? Do they include the product or are they more click-bait driven?
- Headlines: What words do the most popular ads use? What angles are they taking? Are they shocking? Are they product-driven?
- Products: What products are advertisers promoting? Are they related to your product? What are their price points?
- Landing pages: How are the landing pages structured? Are they using advertorials? Are they direct-linking to a product page?
The information you extract here, especially regarding the first points, will help you when you sit down to create your campaign in step #4.
Related Content: How to Improve E-Commerce Landing Pages with Paid Ads Data
Step #3: Set Up an Account with a Native Advertising Network
All the work you do in the next two steps will be affected by the native advertising networks you use. There are dozens of options available, which vary by their international reach, publishers and targeting options. According to estimations from VoluumDSP, the largest networks are:
- Reach: 1.4 billion unique users per month with 10,000+ premium publishers and brands, reaching 44.5% of the world’s Internet population
- Targeting options: Location-based, device type, operating systems, publisher blocking, and audience (both by onboarding first-party data or using marketplace audiences directly accessible in the platform)
- Top websites: NBC, MSN, USA Today, Business Insider, Bloomberg, CBS News, and Fox
- Reach: 1.3 billion people worldwide (from 55+ countries) and 1.8 billion daily page views with 290 million native stories delivered monthly
- Targeting options: Location-based, device type, operating system, browsers, interests, advanced audience targeting, and retargeting (custom audiences)
- Top websites: Hearst, CNN, Men’s Health, Sky News, BBC, The Washington Post, Le Monde
- Reach: 850 million monthly unique visitors from 32K content websites
- Targeting options: Location-based, browser, browser language, device type, operating system, and mobile connection
- Top websites: International Business Times, MSN, The Week, Newsweek, HITC, Inquisitr
- Reach: Between 180-500 million daily impressions
- Targeting options: Location-based, site and placement, device type, operating system, ZIP and DMA, brand, and topic
- Top websites: Forbes, Los Angeles Times, CBS Interactive, USA Today Sports, Tribune Media, Nasdaq
Which Ad Network Should You Use?
The decision will depend mostly on your budget and location. Taboola and Outbrain have the most amount of inventory, the highest-quality websites, and the highest reach.
At the same time, they are the most strict when it comes to approving ads and the most expensive, especially when it comes to U.S.-based traffic. If you plan to promote expensive products with safe ad creatives, either of these two networks works.
MGID and Revcontent are less strict with their creatives and have cheaper costs, but they have a smaller inventory. They are also highly U.S.-based, whereas Taboola and Outbrain have a larger international reach. If budget is an issue, either of these networks represents a wonderful option.
Step #4: Build Your Campaign
Building a native ads campaign is relatively straightforward. Compared to Facebook, there are no complex targeting options to worry about. Most of your work will include writing your headlines, setting your budget, and other basic tasks.
Here’s an overview of what you need to do to set up your campaign:
- Set your marketing objective: Choose from web traffic, lead generation and conversions according to your goals.
- Upload your creatives (i.e. images) and headlines: Start with at least four images and four headlines. Check the network's compliance in case you plan to use clickbait.
- Define your bids: To start, select a bid that’s slightly above the average suggested CPC for your location. This will get you above-average placements and attract higher-quality visitors. You will lower this once you start optimizing your campaign.
When uploading your creatives, make sure to add those that you have either tested on other ad platforms or that you copied from your competitors (assuming they seem to work for them in a similar vertical and location as yours):
It's also a good idea to let the network optimize your bids automatically instead of using fixed CPCs, and a paced ad delivery to avoid burning your budget in a few hours.
Take a look at the following guides from each of the major networks mentioned above to see how to create a campaign:
- Taboola: Create a New Campaign
- Outbrain: Outbrain First Campaign Set Up
- Revcontent: Basic Campaign Information
- MGID: How to Create a Campaign
Step #5: Optimize Your Campaign
Planning your native ads campaigns is half the battle; the other half is optimizing them for success. As the first few days (or weeks) of your campaigns won’t be profitable, you need to look closely at their performance. Your initial goals are:
- To minimize losses and reach the break-even point
- To optimize until the entire funnel works
For best results, you want to target optimization strategy around each of the variables that make up your campaign:
- Images: After spending $50, check how your ad images performed. Cut any images with low CTR (compared to the rest) and no conversions.
- Headlines: Use the same rules mentioned for images.
- Placements & widgets: Cut placements that spend 1X your conversion goal without generating a conversion (this is an optimization strategy known as “blacklisting”). For example, if your protein shake costs $40, you want to stop running ads on any placement that spends that amount without a single sale. The same goes for widgets.
Here are some other optimization strategies that all professional native advertisers use:
- 20% rule: If after spending 20% of your budget you found a variable — headline, images, placement, widget — that has a significantly worse performance compared to the rest, cut it.
- Testing new creatives: The goal is to find the right combination of headline and image with your product page, which will lower your CPCs and increase your conversions.
- Whitelisting: Take the high-converting placements and run them in a separate campaign. This is the “secret sauce” every successful native advertiser uses to profit and scale their campaigns.
If you see that your campaign is underperforming, talk to an account manager. For networks like Taboola and Outbrain, that requires a budget of at least $10K/month, whereas Revcontent and MGID can provide one for less. In any case, their advice can be crucial to optimize your campaigns correctly and fix any issues promptly (like rejected ad creatives).
Once you start to see results, you can scale your campaigns by either increasing your bids, which will help get the best widgets, or your whitelist campaign budget, which will help you get more traffic for your high-converting placements.
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Native advertising continues to be one of the most under-appreciated marketing channels for e-commerce marketers to use. Unlike Facebook or Google, native ad networks won’t ban or penalize you for promoting your products to their publishers (within reason). The costs are competitive and the traffic quality is high. All you need to do is try it! Follow the five steps shown here, and get started with your first native ads campaign today.
If you need help with your native ads campaign, reach out to our expert ads team at Single Grain! Click below for a free and friendly chat: