Before 2011, publisher ad sales teams watched Requests for Proposals (RFPs) roll in for banner ad campaigns — it was the golden age of premium display advertising.
Then, all of a sudden, everything changed.
Demand Side Platforms (DSPs) and their close cousins, the agency trading desk, started to dig into publishers' profits with automated buying, now known as programmatic.
On the other side were the Supply Side Platforms (SSPs) that helped automate the selling of publisher display inventory, and together with the DSPs, they were able to completely automate the marketplace.
It was great to have machines doing all the work – except for one teensy little thing: ad prices plummeted.
For publishers, this commoditization significantly lowered the value of their display inventory. It left them especially protective of their most valuable inventory: the feed. The home page and section pages with streams of stories that have been opening up to include native ads.
With the release of OpenRTB 2.3 by the IAB and working group members like Sharethrough, the ability to create, buy and serve native ads programmatically through Real-Time-Bidding (RTB) is now possible.
While more efficient for advertisers targeting specific audiences or individuals, the rise of programmatic native ads has publishers concerned that the commoditization that happened to display ads may happen to native ads.
Unlike banners, where the merger of automation and the inability to control ad quality quickly facilitated a race to the bottom, programmatic native technologies are giving back control to the publisher.
The key to protecting native inventory from commoditization lies in the ability of the publisher to put the correct quality controls in place so that they can maximize yield without damaging the user experience or diminishing the value of their native media units.
Sharethrough recently released a proprietary quality filtering algorithm, Content Quality Score (CQS), which will score every piece of advertiser content regardless of its origin.
The algorithm that drives the scoring evaluates a variety of factors about each individual advertiser creative, including social sharing, engagement, sentiment analysis and other behavioral data.
The quality score of advertiser’s content is then weighted in Sharethrough’s second-price auction to determine which ad creative will be served on a publisher’s website or mobile app.
“The growth of programmatic native provides an additional revenue stream for publishers and allows advertisers to use both first and third-party data similar to current ad models,"said Curt Larson, Sharethrough's vice president of product. "However, for programmatic native to succeed, publishers will need mechanisms for preserving and protecting the editorial voice of the content in their feeds. Our enhanced content quality scoring gives publishers the best of both worlds: the scale and efficiency of programmatic with control over quality.”
As the volume of advertising requests for native placements continues to grow, there is an increased need for publishers to incorporate technology that can sift through the large quantities of brand content and serve pieces that meet their quality threshold.
Looking ahead, CQS and similar technologies will act as a way to gauge how well a piece of content fits into the site’s voice and user expectations, and how it might impact the integrity of the site.
Publishers like USA Today Sports are beginning to dip their toes into the programmatic native waters, and they are focusing heavily on the balancing act between maximizing revenue and maintaining a quality native ad experience.
“Programmatic native is exciting because it standardizes the buying process and opens up new native demand sources for us,” said Chris Pirrone, general manager at USA Today Sports. "Sharethrough is leading the way in establishing standards and building tools that allow our team to capitalize on the strong interest in programmatic buying channels without sacrificing the quality of our user experience.”
As the market continues to develop and DSPs begin to adopt OpenRTB 2.3, we will begin to see how the quality balancing act plays out.