DAC Blog Authors Part 2: Native Programmatic Advertising
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Part 2: Native Programmatic Advertising

Monday, February 23, 2015

With the first part of the long anticipated Native advertising guidelines recently released by IAB, digital marketing focus has shifted once more to Native Advertising.

What adds to the excitement is that the IAB is close to completing the OpenRTB API Specification 2.3, which for the first time includes two buzzwords of the digital marketing world, Native and Programmatic. As a result over the next couple of months we can anticipate an increased interest in bringing Native Programmatic ads at scale from publishers.

Although Native Programmatic still lacks an official definition it could be described as bringing an editorial-resembling customised ad in front of the right consumer, at the right time and in large scale, each time creating a unique user experience.

For a long time Native and Programmatic were addressed as two different approaches that had little in common.  Programmatic targets the individual consumer while Native targets the publisher’s website or app. No common ground there, right?

However some publishers have started to believe that this is not necessarily the case. Facebook for example, introduced Facebook Exchange (FBX) in late 2013 which uses a combination of Native ads and Real-Time Biding (RTB).  Since then, an increasing number of publishers are interested in taking this merger a step further.  As a result some agencies have already introduced relevant services such as Vivaki’s “Audience on Demand Native”.

How is it different from Programmatic Advertising?

When a user visits the publisher’s website and makes an impression available, the publisher sends a bid request through a Supply-Side Platform (SSP) exactly as it’s happening with standard RTB.  Differences occur during the next stage. Demand-Side Platforms (DSPs) instead of responding with bids including ad tags and banners respond with bids that include metadata such as headlines, thumbnails, logos, description text etc, and it is on these factors that the SSP decision is based.  After the decision with regards to the winning bid has been taken, Native SSP puts together the elements of the native ads using real-time templating that blends into the layout of the publisher’s website or app; something that is not possible with display ads.

Therefore instead of tag, banner, rich media or video files, customisable metadata is carried over instead.

How is it different from Native Advertising?

The key word in this case is scale. Customised ads can reach users at a large scale with only a little bit of standardisation required. Native ads are no longer restricted to a publisher but can reach their target audience wherever they are on the web.

Match made in heaven

So what can Programmatic add to Native? The answer as stated above is scale and automated media buying. And what about Native’s contribution to the pair? Well the answer in this case is relevancy and engagement.

Assuming that scale differences can be overcome, essentially both Native and Programmatic share a lot of common goals: find the right audience, give users the best possible experience, increase brand awareness and ultimately drive conversions. They both try to reach the individual consumer with a customised message.

Therefore it does not come as a surprise that recent efforts of digital advertisers have been focused on finding ways to combine the strengths of both. The challenge is that since the target is the user and not the publisher, it is difficult to achieve customisation through a standard ad unit.

Native Advertising on mobile advertising

Native advertising on mobile has evolved to a trend that has captured advertisers’ attention since metrics show that it clearly outperforms display.  Some believe that the time when Native replaces display on mobile may not be so far away in the future. Native on mobile is expected to increase overall user satisfaction. In a recent study by InMobi, monetisation increased fivefold with their mobile native ads.

The good news for Native Programmatic is that In-feed ads are the easier to standardise as their thumbnail- image-headline format is pretty identical and probably a reason why they are becoming so popular on mobile.

Another recent trend according to nativeadvertising.com is Cards, information presented into rectangular containers similar to Facebook posts or Tweets. Cards could be used to increase engagement with options for liking, sharing or commenting on a sponsored Card but could also drive conversions with the addition of in-card buying.

Quality Concerns

From a publisher’s perspective there is a real concern about maintaining a high level of quality, especially for those who have had disappointing experiences with dynamically filled content or display ads in the past. We all know that a drop in quality of ‘content’ could affect the users’ opinion with regards to editorial integrity; questioning the publisher’s trustworthiness is the worst case scenario. Nevertheless; as long as advance controls through the duration of the process are in place situations like these could be avoided. This doesn’t mean to say there won’t be casualties on the way.

Going forward

As already mentioned a degree of standardisation is difficult to be achieved across all platforms. As a result; in-feed ads are initially expected to be the main focus of Native Programmatic with more ad types to follow as experience and data are accumulated.

Similarly to every new digital marketing trend, the tools and methods that assist performance are expected to evolve in parallel. The expectation is clearly there so it probably won’t be long until Native Programmatic becomes mainstream and hits the media buying headlines. The latest InMobi  / Rubicon Project survey last September found that 57% of digital media buyers were either running or planning to run a mobile native advertising campaign.  How long are you going to leave it before you try it out on one of your campaigns?

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