🎓 When native ads backfire

Ads that appear as regular content get more clicks initially, but drive lower purchase intentions (up to 24% higher bounce rates).                                                                                                                                                                                                                                                                                                                                                                                                                 July 23, 2024 | [Read Online]( When native ads backfire Ads that appear as regular content get more clicks initially, but drive lower purchase intentions (up to 24% higher bounce rates). [Thomas McKinlay]( [fb]( [fb]( [fb]( [fb](mailto:?subject=Post%20from%20Ariyh&body=When%20native%20ads%20backfire%3A%20Ads%20that%20appear%20as%20regular%20content%20get%20more%20clicks%20initially%2C%20but%20drive%20lower%20purchase%20intentions%20%28up%20to%2024%25%20higher%20bounce%20rates%29.%0A%0Ahttps%3A%2F%2Ftips.ariyh.com%2Fp%2Fwhen-native-ads-backfire) New to [Ariyh](? This is a 3min practical summary of a scientific study 🎓 Join 28,487 marketers who use science, not flawed opinions 📈 [Subscribe here]( Today’s insight is brought to you by… [SharpStance]( SharpStance is a positioning and messaging consultancy for growth-stage startups. Over the last few months, I’ve been working with Jenna Alburger at SharpStance to update Ariyh’s brand strategy - excited to show you the new changes soon! I’ve loved working with her, she truly is sharp (but also a pleasure to work with). If your positioning or messaging needs some work, have a chat with her. [Book a 15-min Intro Call ($0)]( Want to sponsor Ariyh? [Here’s all you need to know](. 📝 Intro Native advertising has long been considered a cure-all for digital marketing - overcoming banner blindness and engaging audiences when they are reading what feels like a normal, non-sponsored article or newsletter, not an ad. But is it all it’s hyped up to be? Despite the increase in native advertising budgets, are native ads actually more effective than banners? New research shows the results can be less rosy than they seem. P.S.: Thank you to all of you who bought the new [Playbook of SaaS Optimization]( last week! I’m honored by all the amazing feedback I received 🙏 If you haven’t yet, you can grab your copy [here](. Want to access hundreds more insights like these? [Explore Ariyh insights here](. Native ads receive more clicks than banner ads but have much higher bounce rates Topics: Ads For: Both B2C and B2B Research date: April 2024 Universities: University of New Hampshire, University of Alabama, San Diego State University, Northeastern University 📈 Recommendation Be careful when using native ads. While their click rate is higher, they have a much higher rate of people who immediately leave your website (= a higher bounce rate) when they realize it was an ad. This makes them more expensive than traditional banner ads when counting the number of actual website visits. You can improve native ad effectiveness by keeping the landing page the native ad links to in a similar style as the native ad: valuable, interesting, and a soft sell. 🎓 Findings - People are more likely to click on native ads, but they are less likely to stay on the page, leading to overall fewer real website visits. - As part of an analysis of 212,655 ad campaigns across 13,062 websites, along with field and lab experiments, researchers found that: - Across a variety of categories (clothing, home furnishings, and cosmetics), people were 42% more likely to click on a native ad compared to a banner ad. - In a separate field experiment, covering 969 unique website visits, people were 24.1% more likely to bounce when directed to a page from a native (vs a banner) ad. The two types of ads resulted in similar net visits (170 vs. 207), but the average cost per engaged visit was 16% higher for native ads. - When shown either a native or banner ad, people felt 19.6% more annoyed by the native ad. This annoyance led to increased bounce rates and lower purchase intentions. 🧠Why it works - Native advertising can be in different formats, such as website content (e.g. news articles), sponsored social media posts, or hyperlink listings (search ads). Our engagement with them is influenced by their placement and presentation, as they’re intended to blend with other content on the site. - In contrast, traditional banner display ads stand out and are obviously ads. This tends to annoy us, leading us to develop [“banner blindness”]( where our gaze automatically avoids common banner positions, like the masthead and and side column of pages. - We’re more likely to click on native ads as [they’re camouflaged]( as part of regular content. - But when we do click, especially if we didn’t realize it was a native ad, we feel deceived when sent to an advertiser’s landing page. - This disrupts our browsing experience and annoys us, so we disengage and are more likely to immediately leave the website (bounce) without buying. 🛒 Seamlessly [apply Ariyh Ecommerce insights]( to your Shopify store Want to quickly get results from Ariyh’s recommendations without the technical or design hassle? [Studio 31]( are Shopify experts who will do it for you. Partner up with them and get a: - Bespoke team of experts that integrates with your operation - Fractional CTO, PM, Fullstack Developer, and UI/UX designer - Expert ecommerce team at a fraction of the cost Sounds interesting? [Have a chat](, no strings attached. [Schedule a chat]( This announcement was sponsored. Want your brand here? [Click here](. ✋ Limitations - The research looked at advertising on websites. It did not test native ads as social media posts or search ads. - The study looked at native and banner ads as two distinct categories. But native ads that are more obviously ads (because they clearly say so), and banner ads that are more disguised as website content (e.g. using similar colors) may work differently. - The effect is on average. Differences to the landing page that the ad (native or banner) links will cause big differences in bounce rates. - The research focused on CTRs and bounce rates - generally accepted metrics for the performance of digital campaigns. Other aspects of purchase behavior (e.g. actual sales), as well as longer-term impacts, were not analyzed. For example, [other research indicates]( that when shown an ad too often, consumers turn away from the product as they find the ad annoying. 🏢 Companies using this - Despite higher bounce rates, companies across almost all product categories use native advertising. Native advertising has more than doubled from 2020 to 2021 alone, with the ad spend on native increasing 426% since 2016 ([according to EMARKETER](). - Most websites, especially news outlets, use native advertising as well as traditional banner ads to maximize advertising revenue. - Pioneers in native advertising include legacy publishers like the New York Times, Forbes, and the Economist, as well as newer brands like BuzzFeed, who built their revenue model on native advertising and affiliate marketing. Online shoe retailer Allbirds highlights its emphasis on sustainability and responsible business practices with a native article in the New York Times highlighting the plight of disappearing bird species. ⚡ Steps to implement - If you currently use native ads, switch your focus from measuring cost per click to the cost per successful sale to determine whether they are working more cost-effectively than traditional banner ads. - If you plan to include native ads: - Make sure your ads, and the landing page they direct to, provide meaningful information for customers, rather than just directly pushing the sale of your product. This will reduce users’ annoyance with the ads, leading to lower bounce rates. - Creating unique, engaging, and meaningful content can also give you additional free publicity as users share the content amongst their social networks. - Creative ways you can incorporate your product into meaningful content include: - Recipes using your product for food items. - Content related to healthy living, exercise, and nutrition for health-related products. - Visual content of people doing activities wearing your clothes for fashion brands. - Content centered around key social or environmental issues for brands hoping to highlight their sustainability credentials. - Keep an eye on the ROI from your digital campaigns - if your bounce rate remains high, it may be worthwhile to run test campaigns on a CPA (cost per acquisition) model or a basic CPM model where you are charged for views of your ad, rather than a than cost-per-click (CPC) model. 🔍 Study type Lab experiment, field experiment (with native vs banner ads for a fitness club website), and market observation (analysis of 212,655 native ad campaigns) 📖 Research [Native advertising effectiveness: The role of congruence and consumer annoyance on clicks, bounces, and visits](. Journal of the Academy of Marketing Science. April 2024 🏫 Researchers - [Alexander C. LaBrecque](. Peter T. Paul College of Business, University of New Hampshire - [Clay M. Voorhees](. Culverhouse College of Business, University of Alabama - [Farnoosh Khodakarami](. Fowler College of Business, San Diego State University - [Paul W. Fombelle](. D’Amore-McKim School of Business, Northeastern University Remember: This is a new scientific discovery. In the future it will probably be better understood and could even be proven wrong (that’s [how science works](). It may also not be generalizable to your situation. If it’s a risky change, always test it on a small scale before rolling it out widely. What did you think of today's insight? 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