Native Ad Monetization in 2021: Publishers' Ad Revenue Guide

Thinking from a strategic perspective, digital publishers can profit either from readers, advertising, or some combination of reader revenue and advertising. According to the recent Reuters Institute survey of the world’s leading news publishers, big publishing companies continue to bet strongly on making reader revenue work in the long run: half of the respondents focus on reader revenue, around a third (35%) think that advertising and reader revenue will be equally important, and about 14% pin their hopes on advertising alone.

However, throwing up a paywall or generating revenue through subscriptions can be a risky decision to generate revenue from small website projects, especially startups. With so much competition in digital media, consumers often perceive paywall restrictions as a barrier and are ready to switch to other options available on the market. Paywalls also naturally induce a loss in traffic, by cutting out repeating visitors unwilling to subscribe.

When ads do not interrupt or deteriorate user experience, they do not affect reader engagement or decrease traffic flows on the site. Advertising requires less audience funnel preparation and developing subscription processes.

Also, there is this problem of ‘subscription fatigue’ when consumers are being constantly asked to pay for music, movies, and games; in some markets, media has already reached the upper limit of people who are willing to open their wallets. In the years to come, publishers will most likely continue to rely on advertising to keep their lights on.

So far, with increased competition among websites for user attention and the limited amount of subscription spends, advertising is likely to remain the preferred choice for the vast majority of starters, as well as many established projects. In embarking on this monetization model, digital publishers can further choose from a variety of ad formats and platforms.

The paths most often taken by publishers include:

Google AdSense and other banner ads

When working with AdSense or other display ad servers, advertisers can choose one of the bid models: CPM (cost per 1000 impressions), CPC (cost per click), and CPE (cost per engagement). Publishers earn revenue each time a user clicks on CPC ads, views CPM ads, or performs certain actions after seeing CPE ads. All ads compete in one action based on the expected revenue they can earn for publishers. Banner ads do not necessarily match the design and contents of the platform in which they appear, so their presence might be distracting or disengaging for visitors.

Content recommendation widgets and other native formats

Content recommendation widgets are used for the automated distribution of content at scale and can be placed primarily on article pages, in between paragraphs of content, or below the article. Like all native formats, they are designed to align with the surrounding environment.

A similar format is in-feed native ad units; they also mimic the surrounding site design and aesthetics and can be placed in the content feeds on your site. Typically, native formats are considered to be less annoying for visitors and more useful in providing valuable content.

Video ad units

Video formats are more engaging, have high CTR rates, and therefore are in great demand among advertisers. There are in-stream video ads (before, in the middle, or at the end of video content being viewed), out-stream video ads (between articles), and in-banner video ads (placed within banners and autoplay with no sound). It’s recommended to avoid auto-playing video ads with sound as they may damage readers’ content consumption.

Private ads

If you end up with high traffic volume and a reader profile that coincides with the target audience of particular products, you can contact advertisers directly and sell private ads. There will be no middle man, but you will have to carry out the negotiation process and ad implementation on your own.

Sponsored content

You can also help market products through editorial content, i.e. putting dedicated articles on the website for your audience to see and interact with. In this case, you will also have to build up the audience, communicate with direct advertisers or affiliate networks, and also prepare or at least control this commercial content.

Push notifications

Push ads allow advertisers to engage with users who have opted in for relevant content updates, which are sent to them in the form of notifications even when they left the site. Even though this format has a higher CTR on average, push ads are very intrusive for users.

Pop-unders or pop-ups

Pop ads are placed in the new browser windows or boxes that open automatically on top of the main content (pop-ups) or in the background (pop-unders). These formats are the most annoying and can damage the image of your website.

Today, consumer expectations about online media are very high. Not only do they look for quality content and top-tier user experience, but also they expect ads to be relevant, entertaining and provide value to them rather than broadcast simple advertising messages.

Native ads match the page content and layout and therefore are perceived more naturally by a user. Auto-playing video ads with sound, flashing animated ads, and large sticky ads distract visitors from consuming content they’ve come after. Even banner ads often drag user attention in a negative way, irritating and distracting website visitors.

Another important concern is maintaining transparency and users’ privacy across the ad supply chain. Following IAB requirements, all content recommendation widgets and other native formats have to be transparently signposted, so they appear to consumers as ads and not as editorial content.

One of the most common tactics is placing content recommendation widgets below the bottom of the content. It is very effective because a visitor is offered some new content once they finish reading the article they come for.

However, if you have long forms of content a huge proportion of users may not scroll to the end of each article. Still, you do not want to lose the opportunity to monetize this audience, so consider 1-2 in-article content recommendation widgets.

Even though native ads were originally designed for desktop, we made sure that MGID’s solutions work for accelerated mobile pages (AMPs), progressive web apps (PWAs), single-page applications (SPAs), and other forms of site infrastructure.

Precisely, the AMP Smart widget integrates three formats in one: native recommendation widgets, banner ads, and video units. This format is powered by MGID’s artificial intelligence (AI) algorithm, which creates combinations of ad units to boost revenues, user engagement, and new visitor acquisition. We can also customize the smart widget to your requirements, for example, add more rows or infinite scrolls.

Another important question however, is when you should start monetization. At MGID, we recommend reaching a stable traffic flow of 5,000 unique daily visitors and having at least 30 posts, each of which contains at least 500 words, before placing any ads on the website. All advertising within a page must not exceed 30% of the page content.

The posted content should be unique and align with their headline, pictures, or video. There should not be fake news, disgusting, adult, sexually provocative, or illegal content. Make sure your website is stable, complete, could be navigated easily, and gives a positive experience.

Once your project reaches the above-mentioned traffic milestones and meets all requirements, it’s very easy to sign up and become an MGID publisher. Our support team will implement the necessary customization and make sure that widgets match the surrounding design.

At MGID, we constantly improve our algorithms, add new formats and implement new features on our platform. For example, recently, we added the Native Yield Optimisation solution for publishers, which adjusts the ad format on the go, taking into account potential revenues and the probability of a particular user to convert. Still, there are a few points on the publishers’ side that need to be revisited regularly to make sure that you don’t miss out on your monetization capacity.

Revise traffic sources and audience acquisition strategies

Not all traffic is equal. Users may come to your site from various devices, geos, and traffic sources and engage very differently with ads. Advertisers also set different bids for audiences with particular parameters, for example, by targeting visitors with certain social demographics, coming from a particular geographic region, with certain browser language, etc.

Direct traffic shows the most loyal audience; these are the users who visit the website by clicking on a bookmark or typing in a URL. According to our research of U.S. publishers, these users view several pages and stay on-site the longest, for 5.3 minutes on average. Also, direct traffic generates 17% of revenue while accounting only for 14% of ad impressions. In contrast, app aggregators account for 34% of traffic, which generates only 17% of revenues.

Also, organic visitors are more driven by their intent to find relevant information, so it makes sense that they stay for a while on the website. Organic traffic accounts for 16% of ad impressions and publishers’ revenues.

Improve ad viewability

Ad viewability is one of the most important drivers of a publisher’s revenues; if your ads are not being seen, they cannot perform. Therefore, you have to make sure that all ads have enough viewability, but do not interrupt a reader’s interaction with the content.

The IAB’s viewability standards for static ads require that a user should be able to see more than 50% of the ad pixels for more than one second. For videos, a viewable ad impression means two seconds and a half of the pixels. Some publishers tend to over-optimize their web pages exclusively for viewability, sometimes at cost of user experience, for example, with certain code modules that prevent users from further scrolling until ads are loaded and displayed. In the long run, it will drain the website’s traffic as people switch to less irritating media.

Ideally, you would want to place ads in front of targeted consumers and make them perfectly visible without annoying them. To do that, you must test multiple approaches and take into account the bounce rate, engaged time on page, and other user engagement metrics together with viewability.

Choose the optimal combination of ad widgets

Different people interact with different ad formats, pages, or layouts uniquely, and most publishers install more than one sponsored content widget to accommodate that. To increase visibility and CTR (and also revenues as a result), you can put 2-3 native widgets on a page.

At MGID, we continuously A/B test different combinations, and these proved to be efficient for the vast majority of cases:

• under article + in-article
• smart widget + in-article
• smart widget + in-article: impact
• under article + in-article + sidebar
• under article + in-article: impact
• under article + sidebar + header

A big mistake would be choosing some mix of ad formats and leaving it as is, without further experimentation and testing of alternatives. Rather, we recommend monitoring what other sites in your niche are doing, learn from them and be open to test new ideas.

To uplift user engagement, all ads on your website must give a cohesive experience and should not prevent visitors from interacting with the content they come for. A perfect ad also has entertaining or educational value, so creatives themselves play a crucial role here. With native ads, advertisers are enabled to tell stories or deliver interactive content, educate consumers and place these first touchpoints with the branded content in a contextually relevant environment.

The best way to provide relevant, helpful, and entertaining ads is to strike the very moment a consumer’s interest may occur. With today’s contextual targeting solutions, native advertising can look at the environment a user is surfing and fit into their current content experience more naturally.

Native ads can not only maximize profits from advertisers but also maximize audience engagement with your own content. You can add internal recirculation to MGID widgets and put your articles in rotation to incentivize users to continue their interaction with your site. Our algorithm will create appropriate native ads for your site pages and select the most engaging mix of internal and external content for users to discover.

With MGID native ads, publishers also retain control over the ads put in rotation. Using filters, it is possible to exclude particular ads from rotation, cut out certain landing page types, categories, tags, or stop words.

Native advertising does not contravene user experience with media and maintains visitors’ transparency and privacy. Good native ads are expected to be entertaining, inspirational, or educational and follow the context they are placed in.

With MGID, publishers can access a large pool of advertisers; annually we put into rotation 100K+ new campaigns. With more than 185B content recommendations served monthly, there is high competition for websites’ inventory. Our most advanced targeting algorithms then translate this demand into relevant and engaging ads that enhance audience connections as well as enable the full realization of inventory potential.