There has been lot of clamor recently about the adoption of programmatic native advertising in the near future. It seems that programmatic has become the trend du jour in the world of native advertising since the release of OpenRTB 2.3.
Programmatic native advertising is not something that we will see in the near future…because it is already here! DSPs like Visible Measures and Bidtellect have run programmatic native ads for the past 12-18 months, successfully working with various supply side platforms, even before OpenRTB 2.3 became an open standard. That said, open standards doesn’t mean that the work is complete. In fact, this is just the beginning.
The Curious Case of Open Standards
Open standards are necessary to set guiding principles for all the participants in a given ecosystem. Moreover, they allow people to share necessary data freely and with perfect fidelity. They also prevent lock-in and other artificial barriers to interoperability.
However, the world of open standards is not all copacetic. The creation process of any open standards requires opinions from lots of stakeholders and various interest groups, which results in a painfully slow process of standardization. Case in point, for HTML5 it took almost 10 years to release the first version . The same is true for OpenRTB 2.3, which kicked off in April 2014 and took almost seven months to develop a working draft.
The pace of innovation in ad-tech is extremely fast, and it cannot wait till OpenRTB becomes standardized. Elements laid out in Open RTB 2.3 have already been implemented by innovators on the native side during the past year. Going forward we will see even more adoption by incumbents of ad-tech. While programmatic native advertising is a reality, it’s high time to discuss some of it’s challenges.
Programmatic Native Advertising and Its Future Challenges
Native ads generally get prominent spots within a publisher’s inventory. This is a boon as well as bane. Since programmatic native ads are served in real time, a single questionable creative can have disastrous consequences from a publisher’s perspective. Supply side platforms need to create more sophisticated automation tools for creative filtering and blocking.
Regardless of positioning, there are always concerns as to whether the user actually viewed a native ad or just scrolled past it. To combat this, ad verification and analytics companies are developing advanced solutions that specifically address viewability concerns within the native space. The more sophisticated these tools become, the more accountable native ads will be as well.
Programmatic Pipes vs. Premium Inventory
Over the past year, native advertising has risen among the ranks to become the new premium ad opportunity. This is especially true for direct ad sales teams, who command premium prices for their native ads. Going programmatic means getting commoditized.
Moreover, middlemen like native ad networks and traditional SSPs take a 30-40% cut for their ad serving fees. We need to consider different business models. Publishers should still get to keep their inventory at premium price points, while working with programmatic demand partners.
Attribution has always been the achilles heel of ad-tech. Even Facebook’s COO Sheryl Sandberg voiced concerns about the limits of existing attribution modeling for judging campaign performance. Native advertising is geared towards brand advertisers who will run mid-funnel campaigns. It becomes an even bigger headache in programmatic native advertising given the focus on campaign performance in RTB. Hence, we need to develop new campaign performance models and tools that go beyond last click attribution.
The dots have already been connected in programmatic native. Now is the time to focus on the big picture and address the aforementioned challenges. We have already answered the question of “Can native advertising scale?”. Ad-tech needs to find solutions to the problems outlined in this article, so that the next question, “Can native advertising flourish at scale?” will be answered.