What is Programmatic Native Advertising?

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We wrestle with a lot of technical jargon in digital marketing.

Case in point: the term “programmatic native advertising.”

In the immense world of online advertising, the phrase enters the fray daily. In an effort to be informative as well as objective, I thought I’d look to those that write about advertising and industry insiders to bring you a helpful Q&A.

What is native advertising?

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Native advertising is paid advertising where the ad matches the form, feel and function of the content of the media on which it appears. (Source: Native Advertising Institute)

What is programmatic ad buying?

Programmatic is buying digital advertising space automatically, with computers using data to decide which ads to buy and how much to pay for them. ~ Kenneth Kulbok, LinkedIn Programmatic (Source: Marketing Week)

“Programmatic adds more power to native ads by leveraging machine learning and contextual signals to customize them according to user preferences and placing them at appropriate places.” ~ Vandita Grover (Source: MarTech Advisor)

What is programmatic native advertising?

Programmatic native advertising is a technique designed to incorporate the marketers’ messages and assets in a publisher’s feed. (Source: Aarki)

What’s becoming increasingly popular is having a powerful combination of programmatic and native which enables advertisers to promote advertisements that gel well with surrounding content, at scale. ~ Vandita Grover (Source: MarTech Advisor)

How are native ads purchased?

Brands or agencies use a demand side platform (DSP) to decide which impressions to buy and how much to pay for them. Publishers use a supply side platform (SSP) to sell ad space to brands. These two platforms are then matched up in real time.

One aspect of programmatic advertising is guaranteed impressions. A price is pre-agreed by the buyer and seller before the impressions go live on the website. When the brand needs to amplify the message, or reach a different audience beyond the continuous campaign, marketers can bid for real-time impressions. (Source: Marketing Week)

How does programmatic native advertising benefit advertisers?

Programmatic buying allows advertisers to make native ads even more relevant. By leveraging machine learning and contextual signals, programmatic native ads can be tailored to both the user and the placement at scale, resulting in better performance for advertisers. (Source: Aarki)

Before programmatic ad buying, digital ads were bought and sold by human ad buyers and salespeople, who can be expensive and unreliable. Programmatic advertising technology promises to make the ad buying system more efficient, and therefore cheaper, by removing humans from the process wherever possible. (Source: Digiday)

Users are responding positively to native ads. Users are more than 2X as likely to click on a native ad as a traditional banner. (Source: DoubleClick)

“In comparison to display prospecting, case studies from our agency’s clients have shown me that native ads truly shine when it comes to driving traffic and boosting brand engagement in the long term.” ~ Grace Kaye, Brainlabs (Source: Marketing Land)

What is contextual advertising?

Contextual ads target users based on specific keywords on the page he or she is viewing at the time, therefore the context of the ad links up with the content of the page. It’s an opportunity to be authentic, to deliver messages in the moment and to try to get into your viewers’ heads. (Source: Matchcraft)

Is native advertising a good fit for mobile?

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“The adaptability of native ads means that they perform particularly well on mobile. Knowing that mobile use is constantly growing and rapidly outpacing desktop, this should be a good incentive to focus more on programmatic in the long run.”~ Grace Kaye, Brainlabs (Source: Marketing Land)

According to a prediction made by BI Intelligence, native ads will account for 63% of mobile ad revenue by 2020, up from 53% in 2016. (Source: Aarki)

Is program native advertising wiping out banner advertising?

In the programmatic ad-buying world, native ads are becoming a much larger part of the volume being traded on various ad exchanges. But, so far, programmatic native ads remain a tiny slice of the overall advertising market, while widely derided banner ads continue to reign supreme. (Source: The Wall Street Journal)

While it remains a small slice of the massive digital ad market, native programmatic appears to have momentum. For example, the ad tech company The Trade Desk said that the revenue it derived from native ads grew by 1,000% in 2016 as display advertising shrunk. (Source: The Wall Street Journal)

“What makes native programmatic advertising such a win for advertisers is that it connects to the consumer in an innovative way (because it’s relevant advertising to them), and also allows for marketers and advertisers to place advertisements that seem intuitive to consumers.” ~ Ashley Yenick, Advertising Week (Source: HuffPost)

Is programmatic native advertising more effective than banner advertising?

Yes.

Native ads that are programmatically bought and placed offer brands the ability to capitalize on increased relevance and personalization. By leveraging machine learning and contextual signals, programmatic native ads are tailored to the user resulting in better performance for advertisers.

When comparing the two ad types, the following numbers are hard to deny:

Let’s continue comparing the ad types on some other pertinent fronts.

  • Efficiency—Programmatically placing native relies on AI and real-time bidding to make the process automatic and more effective for reaching targeted demographics. CPMs can be adjusted in real time and scaling programs is easy.
  • Flexibility— Banner ads are bought in fixed configurations, so their placement can be inflexible and a bad fit for mobile. Mobile native ads offer the flexibility needed to modify the appearance and positioning of an ad.
  • Consumer experience—For both consumer experience and engagement, programmatic native ads win easily over banners. It’s well understood “banner blindness” now plagues display ads, while native ads are likely to arouse interest because they are generally related to the content the user likes.
  • Reach—Programmatic native ads connect to informative content, which increases the chance of the content being shared.

What challenges lie ahead for programmatic native advertising?

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In a blog post from Native Advertising Institute, Todd Krizelman, CEO of MediaRadar, was asked, “Which factors lie behind the surge in programmatic native?”

“The major driver is consistent, good performance,” he began. Todd continued by saying, “Programmatic native is mostly evaluated on the same KPIs as display advertising. In a contest against leaderboards and many other standard IAB ad display units, programmatic native scores well with high click-rates. And because this is programmatic, it can scale.”

He was also asked about the challenges ahead…

“Measuring performance of programmatic native is still evolving. Although some have great systems in place, there is no definitive, standard set of metrics. This is a challenge for some sellers, and buyers.”

Vandita Grover, at MarTech Advisor, offered interesting insights about a few more challenges…

“Display ads have been around since the word ‘go’ in digital advertising. While there isn’t a high technical know-how required to run display ads, a higher investment in technology is needed for programmatic native ads.Advertisers need to produce creative native ads and this can prove to be challenging.”

Finally, she added not every publisher’s website is ready to accommodate programmatic native ads.

I propose it’s time for publishers, agencies, brands and everyone across the digital advertising ecosystem to get ready. Though it has a technical-sounding name and takes a mouthful of words to accurately define, I submit the benefits of programmatic native advertising can be explained in just a few:

It works for how we interact with information now.