Sharm Tank Vol. 40

Happy Friday,

Buckle up, because this week’s newsletter is tactical and dense—just the way I like it.

Today, I want to talk to you about the merits and best practices behind native advertising.

The days of relying solely on traditional banner ads are long gone. Consumers have grown weary of disruptive, in-your-face advertising, giving rise to native advertising—a strategy that seamlessly integrates with the content people are already consuming.

Native advertising isn't just a trend; it's a response to how audiences engage with content today. Unlike traditional ads that stick out like a sore thumb, native ads blend effortlessly into their surroundings, providing value rather than interrupting the user experience. This approach not only captures attention but also drives meaningful engagement—something that is increasingly difficult in an ad-saturated world.

One platform that’s making waves in this space is Taboola. As a leader in content discovery, Taboola connects brands with audiences at just the right moment—when they’re most open to discovering something new. It’s an effective way to ensure your content gets seen by the right people, at the right time.

Let’s dive a little deeper…

The True Unlock of Native Advertising

What makes native advertising so compelling in 2024? It’s all about the experience.

Picture this: you're scrolling through a news article, fully engaged, when you come across a piece of content that feels just as informative and relevant as the article itself. You’re drawn in, not pushed away. That’s the magic of native advertising. It doesn’t disrupt; it enhances.

This seamless integration is what sets native ads apart. They fit the form and function of the platform on which they appear, making them less likely to be blocked or ignored by users. With ad blockers on the rise—currently affecting around 27% of internet users in the U.S.—native ads provide a way to reach audiences that traditional display ads simply can’t touch.

Plus, the numbers don’t lie. In 2023, U.S. native display ad spending closed in on $100 billion, and it’s only going to grow from there. By 2025, native ads are expected to drive 79% of all digital ad revenue. If you haven’t yet tapped into this powerful tool, now is the time.

How Native Advertising Works

Native advertising operates on the principle of blending paid content with the organic content of the platform on which it appears. Here’s how it typically works:

Content Recommendations: At the core of native advertising is content recommendations. These recommendations appear within a feed, alongside editorial content, or as part of the overall user experience on a website or app. For example, when browsing a news website, you might see articles or videos suggested as “recommended for you,” which are actually sponsored content pieces designed to capture your interest without disrupting your experience.

Personalization Through Data: The effectiveness of native advertising lies in its ability to deliver personalized content to users. This personalization is driven by data—everything from browsing history, and device type, to time of day, and even location. Platforms like Taboola, which is the world’s largest discovery platform, use advanced AI algorithms to analyze this data and predict which content will resonate most with specific audiences. The goal is to recommend the right content to the right person at the right time, increasing the likelihood of engagement.

Auction and Bidding Systems: To determine which content gets shown to users, native advertising platforms often use an auction system. Advertisers bid on the opportunity to have their content recommended, with two main factors influencing the outcome: Click-Through Rate (CTR) and Cost Per Click (CPC). CTR indicates how appealing your content is to users, while CPC reflects how much you’re willing to pay for each click. The combination of a high CTR and a competitive CPC increases the chances of your content being recommended across the network.

Advanced Targeting: Native advertising excels in its ability to target specific audience segments. Advertisers can set parameters based on demographics, interests, geography, device types, and even the time of day to ensure their content reaches the most relevant audiences. This precision targeting helps optimize ad spend and improve the effectiveness of campaigns.

Performance Optimization: Once a native advertising campaign is live, ongoing optimization is key to achieving the best results. Platforms provide detailed analytics and insights, allowing advertisers to monitor performance and make data-driven adjustments. Whether it’s tweaking the creative elements, adjusting bids, excluding specific publishers, or refining the target audience, continuous optimization ensures that campaigns remain effective and deliver a strong ROAS.

My Playbook for Mastering Native Advertising

To truly succeed with native advertising, it’s essential to go beyond the basics and leverage advanced strategies that can maximize your campaign’s performance. Here are four insider tips from Sharma Brands that know how to make native ads work:

1. Adjust Bids by Site to Boost Performance:
Unlike platforms like Google Ads where you might focus on optimizing bids based on overall cost-per-acquisition (CPA), native advertising demands a more nuanced approach. Adjust your bids on a site-by-site basis to reflect the performance of each site. Start by setting a cost-per-click (CPC) that’s lower than your revenue-per-click (RPC), then refine your strategy as you collect data. Advanced advertisers use metrics like landing page clickthrough rate (CTR) or add-to-cart rate as proxy indicators, allowing them to quickly identify and scale top-performing sites while pulling back on underperformers.

2. Build a Full-Funnel Strategy:
Native advertising isn’t just for top-of-funnel brand awareness. To maximize its potential, use native ads throughout the entire customer journey—from awareness to conversion. For instance, language learning platform Babbel used native discovery to drive both brand awareness and conversions. By distributing content across a network of premium publisher sites, Babbel not only reached new audiences but also converted them into paying customers, contributing to over 20% of their content marketing leads.

3. Retarget Native Audiences with Search Ads:
Leverage the data gathered from your native ad campaigns to enhance your search ad strategies. By understanding user behavior and interests from native ad clicks, you can create more targeted and effective search campaigns. This approach not only helps in refining your audience segments but also opens up opportunities to sell these valuable segments to data providers, adding another revenue stream to your efforts.

4. A/B Test Key Elements of Your Campaigns:
A/B testing remains one of the most effective ways to optimize your native ad campaigns. Focus on testing different elements such as ad creatives, audience segments, site placements, offers, and landing pages. For example, try testing various headlines, images, and CTAs to see which combinations drive the most engagement. You can use tools provided by your platform, such as creative testing features, to identify which creatives resonate best with your audience before launching a broader campaign.

Our Favorite Platform

When it comes to maximizing the impact of your native advertising in 2024, Taboola stands out as the platform of choice. Why? Because Taboola delivers on every front that matters to marketers today.

Taboola reaches over 1.4 billion unique users each month, delivering 450 billion content recommendations. It’s partnered with top-tier publishers like NBC News and USA Today, ensuring that your ads are placed in front of engaged, high-quality audiences. The platform’s advanced targeting options allow you to zero in on your ideal audience, whether by geography, interests, or even the device they’re using. And with three prime ad placements—homepage, mid-article, and below-article—Taboola maximizes your visibility and engagement.

On the cost side, Taboola offers a competitive edge. It delivers high traffic volumes at a cost that’s manageable for businesses of all sizes, making it an attractive option whether you’re a startup or an established brand. The user-friendly interface also means you can set up, monitor, and optimize your campaigns with ease, even if you’re not a seasoned native advertiser.

But what truly sets Taboola apart is its commitment to helping you succeed. The platform provides real-time analytics, offering insights that allow you to optimize your campaigns on the fly. Whether you're looking to increase brand awareness, drive conversions, or engage a specific audience segment, Taboola gives you the tools to make it happen.

The Future is Native

By providing content that aligns with user expectations and enhances their experience rather than interrupting it, native ads build stronger connections and drive better results. 

Are you ready to elevate your brand’s digital presence with native advertising? The tools are in your hands, and the timing couldn’t be better.

Normally this is where I would say, “Now, let’s get into some fun stuff…” but this is already 1,400 words and I think we’re both a little tired so let’s leave it at…

Have a great weekend everyone!

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