Native Ads Don't Need to be Relevant to Work.
Banners Suck! You've heard that one before. Well, nothing could closer to the true; for consumers and marketers alike. They don't look good, they're annoying, nobody clicks on them — and of course, they don't monetize for shit.
Alas, this is not a bash-the-banner article. This is about native ads, and how they have the potential to outperform just about every other ad unit — even when targeting isn't spot-on relevant.
I regularly get asked from app developers whether ads we serve are “relevant” to their users and how much control they have over this. I think there is a misconception in mobile ad-tech that ads are actually targeted — in general, they aren’t.
But to get a full picture we should first get clear on relevance. You see, relevance is relative (that’s a good one). An ad could be considered “relevant” if it was promoting a product that was aligned with the content or purpose of the app. For example, showing a Pampers ad on a mommy app makes total sense.
But relevance can also be looked at from a different lens, incidentally, the one that Facebook primarily sees through. An ad could be considered relevant if the target user actually expressed interest in that product or category. For example, at one time I liked Nike, so if you show me an Adidas ad, it might in fact be relevant, even if I saw that ad in a stock-picking app.
Like I said, relevance is relative.
But, I say relevance isn't the most important thing, in fact, it probably does more damage than good. Here’s why.
It’s true, the more granular the targeting, the more relevant your ads will be, but you won't necessarily maximize yield. In that sense, increasing fill rate will probably generate higher returns than quality will. The issue is that granularity affects inventory and volume.
Think about it, if you only show financial services related ads in a stock-picking app, you're limited to advertisers in that category, duh. But now you're competing for that inventory with thousands of other apps, so maybe you get 10 or 20% filled.
But you're happy. Your day trader users saw ads for banks, and insurance and other lame finance products. Sure, it’s “relevant” but does it actually perform, and more importantly does it perform better than a slightly less relevant ad filled at 80 or 90%?
The answer is almost certainly no. Fill rate trumps relevance, at least at present. If you read my stuff, you'll know I’m an inventory thumper not a CPM whore.
But you're a purist. You don't want shitty insurance ads showing in your overbearing moms trying to get pregnant app. Ok, so be it.
Enter native ads. Native ads are special in that they simply don’t look like ads (hence the term). They just look, well, natural. And this has a huge effect on performance, let me elaborate for ya’ll.
There is a psychology about ads. People engage with ads for various reasons. Equally interesting is that people don't engage with ads for similar reasons.
People will straight up ignore your ads if they think they disrupt the user experience. This has been proven beyond a shadow of a doubt on web. When was the last time you're even noticed a banner at the top of a website, let alone clicked on one. Mobile is no different; the bottom fixed banner is pretty much ignored now a days.
We become indifferent or worse contempt. Eventually, we literally don't even see them. This is a much bigger driver of performance than irrelevance is. And that’s why native ads perform so well, even when they aren't relevant. Users don’t become indifferent — in fact they tend to peak peoples interest, much like a piece of content might. It’s actually pretty fascinating.
So that’s the scoop; native ads just work. Yes, we want more relevance. And yes, that’s coming soon. The amount of data that is available to advertisers on mobile is astronomically higher than web. Eventually when demand increases, relevance will too.
But for the moment, if you want to make money, show an irrelevant native ad.
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