Before last year’s update to the OpenRTB protocols set out the tradable components for real time bidding on native inventory, native ads were considered as solely a bespoke and custom ad unit. Subsequently, the benefits of native (processed differently to banner ads, resulting in higher engagement rates, brand lift and purchase intent) were considered to be limited in their scale and outside the highly automated ecosystem that has developed around display and pre-roll advertising.
But with the arrival of programmatic native, the implications of this new format for all publishers and advertisers cannot be ignored. Native is the highest impact ad format, and according to Business Insider, programmatic revenue is expected to account for half of the digital advertising market by 2020.
Layering programmatic buying and selling capabilities onto native ads stands to make these ad transactions smarter, more data-driven and more targeted than ever before, increasing the value of an already powerful format.
Programmatic native takes all of native’s existing benefits and adds in new powers and possibilities:
Leveraging a publisher’s proprietary data and audience targeting, a brand could, for example, target people between the ages of 25 and 40 who read major metropolitan newspapers online with a piece of native content tailored to their interests.
A retailer, using a publisher’s data, could target someone who lives within driving distance of a new store they've opened, with a native ad they're much more likely to actually read than a traditional banner ad.
This same retailer, rather than retargeting someone who's been to their site over and over with reminders of a product they looked at, can target them with related content to engage them in the customer journey, such as products reviews, videos, or news articles.
At its most basic level, programmatic opens up the benefits of native advertising. Early attempts at programmatic native risked turning things into a cottage industry stacked with different workarounds. The OpenRTB protocols standardized these buying processes for everyone and allowed all publishers to easily open up new native demand sources and regain control of their own destiny.
But programmatic native doesn’t just open up the old benefits of native, it expands them with the powerful new element of precision mentioned above. With programmatic native, publishers can both trade off the value of the format and guarantee advertisers they are marketing to their intended audience.
The Rise of Native PMPs
As they have with display ads, private marketplaces for native ads are where it all comes together. These private marketplaces are exclusive RTB auctions where publishers invite select buyers to bid on their inventory at agreed upon rates. They require minimal extra development time, and allow publishers to scale their native revenue without sacrificing control over quality or pricing. Private Marketplaces give publishers control over which buyers are accessing their inventory via RTB and at what price. It allows publishers to offer certain impressions at premium rates. And then, in the event the private marketplace deals do not fill an impression, the impression can optionally get passed back to the open exchange.
Private marketplaces are a win-win for buyers and sellers. They offer advertisers more precision with their targeting, and allow publishers to keep fostering important buyer relationships.