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Why Small Businesses Need to Invest in Native Advertising

By Kristen Herhold, Senior Content Writer
May 31, 2019


According to a new survey from The Manifest, fewer than 40% of small businesses spend less than $10,000 on advertising each year, and most small businesses plan to try a new advertising medium in 2019.

Thanks to the rising use of ad-blockers, though, about half of advertising messages will never reach their intended audience. One increasingly popular way businesses manage ad-blocking challenges is by investing in native advertising.

Business Insider predicts that native advertising will dominate all other forms of advertising and will make up nearly three-fourths of ad revenue by 2021.

This year alone, U.S. advertisers are predicted to spend $44 billion on native advertising, reflecting the value the ad industry finds in the native concept.

Small businesses should create a native advertising strategy in 2019 to get ahead of the curve and engage with customers with high-quality content and online experiences they won’t associate with traditional, outbound advertising. 

In this article, we explore how native advertising is beneficial to small businesses and examine how much they should spend on native advertising. Use this guide to jump-start your native advertising efforts in 2019.

The Value of Effective Native Advertising

Before your small businesses invests in native advertising, you need to understand its value and what real, effective native ads looks like.

If effectively planned and executed, native advertising can be a positive experience for consumers that drives high-quality traffic to your website.

According to a report by Hubshout, a majority of people are more likely to click on sponsored articles than banner ads. Specifically,

  • 68% of people say they have read a sponsored or promoted article at some point.
  • 73% of people who have read sponsored or promoted content think it has as much or more value than organic content.
  • Almost all people (85%) say native ads do not impede their user experience on websites.

The New York Times is an excellent example of how well-done native advertising can provide an appealing, positive experience for readers.

For example, Cole Haan authored a 1,700-word feature about the grueling training routines of professional ballet dancers.

Screen Shot 2019-05-31 at 12.10.27

The only distinguisher of its sponsored nature is the small “paid post” banner at the top.

A positive native ad experience is similar to high-quality content marketing, in that it provides value to the consumer through the quality and and relevance of the content – its text, production, and presentation.

When executed well, native advertising can attract and retain consumers’ attention in the same way as content marketing.

Small businesses that understand the value and appeal for native advertising need to consider how it can fit in their advertising strategy.

Native Advertising Expands Audience and Brand Awareness

Native advertising can expand your audience, drive traffic, raise brand awareness, and boost conversion rates.

Specifically, native advertising provides visibility and awareness that produce positive brand association. These include:

  • Paid search ads that place you at the top of high-value search engines results pages (SERPs)
  • Content that provides expert advice or information that attracts customers

As more people use ad blockers and traditional ads receive less attention, native advertising provides a solution for brands trying to break through the noise.

How Much Should Your Small Business Allocate to Native Advertising?

Creating a marketing budget for your small business depends on a variety of factors:

  • Digital and social media channels your target customers prefer
  • Revenue and budget
  • Business objectives
  • Competitive landscape

Small businesses with annual incomes under $5 million and revenue margins of 10% to 12% typically spend 7% to 8% of their revenue on marketing, but only one-fourth of that budget is typically dedicated to brand development such as native advertising.

Native advertising, though, requires significant investment. To produce content that people will engage with and genuinely enjoy, your small business needs to invest significant time and budget to its production.

Of course, budgets aren’t always flexible or negotiable. If you have a hard budget ceiling, give careful consideration about how how you divide your native advertising budget. It’s better to publish a small amount of high-quality content than large quantities of content that get low results.

Many businesses rely on ad agencies to help them find the best advertising budget for their needs.

Plan on Allocating Funds for Native Advertising in 2019

Native advertising can your small business’ brand awareness and drive high-quality visitors to your website.

The amount you budget on native advertising should be relative to your annual revenue and take several other factors into consideration.

If you haven’t tried native advertising yet, consider slowly replacing your traditional online advertising, such as banner ads, with native ads as you test and measure the results.

Story by Kristen Herhold

Kristen Herhold is a Senior Content Writer for The Manifest, a B2B news and how-to site in Washington, D.C. She leads the company’s research about advertising agencies, trends, and cost.

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