As Programmatic Native Turns Two, So Begins a Transformation of Ad Strategies

on The Future of Advertising

The following article was originally published in The Drum on August 23.

The groundbreaking Native OpenRTB 2.3 spec was passed by the IAB in March 2015, and Sharethrough (the largest Global Native Exchange) announced its first integration with AppNexus in September of that year. At that stage, the mere fact that native advertising could be traded programmatically - often written off as too custom - was a huge deal.

Programmatic native may still be in its technical infancy, but it has come a long way, fast. Driven by these recent programmatic capabilities, native ad spend is expected to double globally by 2020.

The arrival of programmatic native has helped publishers and marketers transform their digital advertising business with better-performing and more respectful ads. As the market has grown, we’ve seen a proliferation of sophisticated new buying techniques, encompassing new format innovation and expanding dynamic creative possibilities.

Native outstream video

Native video is the natural evolution of pre-roll and other mobile video formats. It’s the inevitable direction of the video market and has led to a huge amount of creative innovation. It is mostly viewed without sound, so brands are experimenting with attention-grabbing imagery, bold in-video text and captioning to capture attention. The combination of the headline and text with the video has proven to be potent: esearch from Sharethrough and Kantar Millward Brown saw that native video campaigns return almost three times higher brand lift than other non-native formats.

Building off huge increases in demand (Sharethrough saw 600 percent growth in demand for native video from its managed service alone in 2016) major DSPs have begun to build in support for native video in 2017, allowing it to be programmatically traded.

Native private marketplaces

The ad industry saw an explosion in brand safety concerns this past year, with pre-roll ads for popular brands showing up before offensive UGC videos on YouTube. Chase Bank made headlines in the US, doing a manual inventory of all of the 400,000 sites it was purchasing ad space on across the internet (and cutting back by 99 percent).

Programmatic native private marketplaces are a smart middle ground for brands that care about brand safety but don’t want to turn their backs on programmatic audience targeting. These private marketplaces are exclusive RTB auctions where brands can work with publishers to bid on select inventory at agreed-upon rates. For brands, private marketplaces are the next step in native ad management strategy, allowing them to work with trusted publishers and get access to high-value native inventory, while accessing their audience data so they lose none of the targeted precision of real-time bidding.

Dynamic Native Ads

The marriage of native advertising and dynamic creative optimization (DCO) is hot off the presses (Sharethrough and Flashtalking announced an industry-first partnership in June to bring the product to market), but the combination is seamless and intuitive. Advertisers upload variations of different components of a native ad to a user interface, which passes a DCO tag through a DSP and into an ad exchange, which then calls back to a company like Flashtalking, when its client’s bid is the winning one.

For years, brands have executed DCO programmatically, personalising the creative for a user based on a range of individual factors: location, gender, audience profile, time of day, browsing behaviour, trending products, media consumption and even local weather. The ability to utilise DCO in native advertising campaigns brings a powerful and highly complementary new tactic, enabling brands to tailor each component of the native ad - headline, thumbnail, description text, URL - to the individual user and get the most impact from every impression. Traditional DCO requires considerable investment from brands to design entirely new creatives for each situation, while dynamic native ads require much less time-consuming tweaks and optimisations to the various components - writing an additional headline is far easier than creating an additional banner asset.

Native advertising spend has outstripped traditional display by all industry estimates, and programmatic native is driving the next evolution, putting the era of interruptive and annoying messages and stolen attention further and further in the advertising industry’s past.