Programmatic vs. Native Advertising: What’s The Difference?

Many marketers scratch their heads when terms like “programmatic advertising” and “native advertising” are used. These forms of advertising aim to get your attention, but they do so in very different ways.

Programmatic advertising involves software and real-time bidding for ad space, while native advertising blends ads into content streams. We are going to discuss these two types of advertising forms in more detail, programmatic vs. display advertising, and how they can work together to create a winning marketing strategy.

What Is Programmatic Advertising?

Programmatic advertising refers to an automated process for buying and selling impressions across countless websites in real time. It’s a marketplace where website owners sell ad space, and advertisers bid for it, all happening in milliseconds, powered by complex algorithms. Programmatic ads analyze vast amounts of data to find the perfect spot for your ad at the precise moment a relevant user is browsing.

Here are the key players in this automated marketplace:

  • Advertisers: The marketers define their target audience and set their budget for the ad campaign.
  • Demand-Side Platforms (DSPs): They connect marketers to a vast network of multiple ad exchanges, which are marketplaces where website owners sell their ad space.
  • Supply-Side Platforms (SSPs): Website owners use these platforms to sell ad space on their websites.
  • Real-Time Bidding (RTB): The DSPs, using your target audience criteria, bid on ad space on relevant websites in real-time auctions on your behalf. Every time a user visits a website with available ad space, an RTD auction occurs in milliseconds. The DSPs bid against other advertisers based on your budget and the user’s profile.
  • The Winner: The advertiser with the highest bid wins the auction, and their ad is displayed on the web page.

Examples of Programmatic Advertising

Let’s say you are a company launching a new fitness tracker. Here’s how programmatic advertising can work for you.

You define your target audience as someone interested in fitness, health, and wearable technology. Your DSP searches the ad exchange for websites that address fitness enthusiasts, such as health blogs or running gear e-commerce stores.

The DSP automatically bids on ad space on these websites based on your budget and criteria. Once you win the bid, your ad with the new fitness tracker appears on relevant websites.

Benefits of Programmatic Advertising

  • Efficiency: Programmatic ads save you a lot of time and effort. You don’t have to negotiate with each website owner manually.
  • Targeting power: Reach the exact audience you want more accurately. You can just define your ideal customer, and it will find them across the web.
  • Scalability: Run your ad campaign across multiple websites. Programmatic ads allow you to scale your reach easily.
  • Data-driven decisions: Track your campaign’s performance in real-time and adjust based on data insights.

However, you might face challenges. The effectiveness of programmatic ads relies heavily on accurate data. If your targeting criteria are wrong, you might reach the wrong audience. Seeing the same ad repeatedly can cause user fatigue and reduce its effectiveness. Also, the complex nature of these ad formats can make it difficult to track exactly where your ads are displayed. Since these advertising campaigns require real-time bidding, you don’t always have complete control over where your ads appear. There’s a chance they might end up on low-quality websites that don’t align with your brand.

What Is Native Advertising?

In native ads, the ads themselves become part of the content stream. They integrate with the platform’s design. You might have encountered articles on a news website and later realized halfway through that it’s actually an ad. This is native display advertising.

Unlike regular banner ads, native ads take a subtler approach. They aim to create ads that feel like a natural part of the user experience and easily integrate with the surrounding content. Examples are sponsored articles on a news website, informative infographics embedded in a blog post, or visual ads of product listings within display network advertising platforms.

The foundation of native advertising is high-quality content. These ads include articles, video ads, infographics, or social media posts that offer genuine value to the user. For these ads to be effective, it needs to be contextually relevant. The format and content of the ad should fit with the platform on which it appears and resonate with its audience.

These display ads should be clearly labeled as “sponsored,” “promoted,” or “in collaboration with” to avoid misleading users. This way, you are letting them know that the content is brought to you by a particular brand.

Examples of Native Advertising

Many online publications create informative listicles on Google display network like “Top 10 Must-Have Tech Gadgets for Students.” These articles might integrate native advertising by featuring specific products within the list accompanied by high-quality images and user reviews. This approach gives valuable information to readers while promoting relevant products.

Benefits of Native Advertising

  • Higher Engagement: People pay more attention to and interact with native display ads than banner ads, which are often ignored or blocked by ad blockers. Engaging content in digital advertising naturally grabs user attention and encourages clicks and conversions.
  • Brand Storytelling: Native display ad networks are online advertising platforms where you can tell your brand story in a more engaging and informative way. You can show your expertise, highlight product benefits, or connect with your audience on an emotional level.
  • Building Trust: Native ad placement can build trust with users by offering content that genuinely benefits them. They’ll see you as an important resource, not just a company trying to sell something.

However, there’s a flip side to the native ads. Creating native display ads content requires more effort than simple banner ads. You’ll need to invest in high-quality content creation to stand out and resonate with your audience. Native ads usually reach a smaller audience compared to large-scale programmatic advertising campaigns. The effectiveness of your campaign depends on choosing the right ad network platform that aligns with your target audience. Each platform has its own guidelines and content requirements, so you’ll need to adapt your approach accordingly.

Key Differences Between Programmatic and Native Advertising

Programmatic and display ads both aim to capture user attention and drive conversions, but they operate in different ways. Let’s discuss native advertising vs programmatic ads in detail:

Goals

Programmatic Advertising: Here, the primary goal is to achieve maximum reach and optimize conversions. By accurately targeting specific demographics and user behaviors, programmatic advertising works to get your ad in front of the right people at the right time. So it can drive clicks, app downloads, or purchases.

Native Advertising: The focus here shifts from pure conversions to brand storytelling and building long-term relationships with your audience. Native ads educate, entertain, or inform users with valuable content. They subtly integrate your brand message within the narrative. The goal is to build trust and brand loyalty so it can drive organic conversions down the line.

Effects of Ad Blockers

Programmatic Advertising: Regular banner ads displayed through programmatic campaigns are prime targets for ad blockers. These software extensions can reduce the reach and effectiveness of programmatic display advertising, as users won’t see your ads.

Native Display Ads: Since native ads are organic content, they often bypass ad blockers. As long as the content is genuinely valuable and clearly labeled, users are likelier to see and engage with it, even if they have enabled ad blockers. This is another key difference when it comes to programmatic ads vs display ads.

Audience Reach

Programmatic Advertising: One of the biggest strengths of programmatic advertising in digital marketing is its ability to reach a vast audience. You can reach a large pool of potential customers who fit your specific criteria by utilizing ad exchanges and targeting capabilities.

Native Ads: These ads have a smaller reach compared to programmatic campaigns. They target specific audiences within the chosen platform and create a more focused group of users. However, the level of engagement with native ads tends to be much higher.

Similarities Between Programmatic and Native Advertising

Despite their differences, comparing programmatic vs native advertising also reveals certain similarities. These two types of advertising share a few key strengths that make them powerful tools for digital marketers.

Advanced Audience Targeting Techniques

Both types of advertising follow advanced audience targeting. Programmatic advertising uses demographics, interests, and online behavior to ensure that your ads reach the right people. Native ads can also be targeted strategically by focusing on content and platform fit. For example, sponsored content on a parenting website can be directed towards parents of your children.

Easily Complement Each Other

Programmatic ads can raise brand awareness and drive traffic to your website, whereas native content can convert visitors into loyal customers. This one-two-punch approach allows you to reach a wider audience with programmatic ads and then nurture leads with informative and engaging native content.

The Future of Advertising: Programmatic vs Native

The future of digital advertising space is where both programmatic and display ads can work hand-in-hand to create a complete marketing strategy. Programmatic advertising will evolve with even more advanced targeting capabilities and data-driven insights. On the other hand, native ads will see a rise in interactive formats and easy integration with emerging technologies like voice search and augmented reality. Consider your goals, target audience, and budget when choosing between these tools. The most successful campaigns utilize a combination of both these advertising strategies.

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