Native Advertising Earns Publishers More Revenue

There’s a lot of talk about why native advertising and other integrated ad models are great for advertisers and users: They perform better, users like them, etc. But how does the model work for publishers? Well . . . great!

In a new article from VentureBeat, a strong case is made that publishers can greatly benefit from the far higher CPM that comes from serving ads with superior CTR:

The math behind why trusted native ad units work for publishers from a revenue perspective is revolutionary for the digital advertising space. Here’s why: When it comes to revenue, a publisher’s lighthouse is Revenue per Thousand Impressions (CPM) for any real estate it dedicates to an advertising unit. Meaning: For every thousand page views, how much money will this unit generate? Herein lays the big promise behind native ads: Content marketing units make the math work because of increased click-through rate. It’s fairly intuitive: Would you rather click on a real piece of content or an ad for teeth whitener?
– VentureBeat: The secret sauce of native advertising

The article goes on to break down some examples of how a native advertising scenario could play out against a display model.

Content marketing and native advertising flips this lame equation around. To start, the cost-per-click rates content marketers pay are lower, in most cases much lower ($.50 and under) than their interruptive ad unit cohorts. That’s okay: the increase in CTR makes up the difference and then some.

Let’s look at an example:

$.50 CPC on a text link ad gets .02% CTR = $20 net CPM to the publisher

$.06 CPC on a real piece of content gets a .40% CTR = $24 net CPM to the publisher

This math is exactly why most premium publishers are swapping out traditional, interruptive ad units for content marketing units, especially in highly engaging positions on their pages, like footers and sidebars. –  VentureBeat: The secret sauce of native ads — the next wave of advertising

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