By Sultan Khan, CEO, AdMaxim
If you work in marketing, there are two words that will have become regular fixtures in your thinking and talking about advertising over the past three years; programmatic and native.
Programmatic – the automation of the buying and selling of digital ads - has cut costs and made campaigns much more effective for brands. To say it's taking the industry by storm could even be an under-statement, given that IAB figures show that 45% of online display ads in the UK were bought this way in 2014, up from 28% the previous year. It is probable that the figure is now beyond 60%, given eMarketer's predictions.
Programmatic is even more prevalent in mobile, with 64% of mobile ads in 2014 being bought using programmatic methods.
Where programmatic has brought benefits related to scale and the application of large volumes of increasingly intelligent user data, the phenomenon that is native advertising has so far existed in a different space. Native ads are designed to echo the look and feel of the editorial context that they appear within, in an attempt to respond to digital user's frustrations with intrusive ad formats.
Other factors have also contributed to the huge growth in popularity of native ads (spending on the format rose 49.9% to £776m in 2015 in the UK). Our constant exposure to social media platforms has arguably kick-started the development of native, as ads appear in feeds that are highly reflective of regular posts in their design.
Publishers spotted the opportunity for revenue and have spent the past few years exploring ways of offering native ads, developing templated slots within their content management systems. The Guardian, for example, created its Guardian Labs division two years ago to develop its native advertising capabilities, building a team of 133 and developing its own proprietary analytics system.
Publishers have also been exploring partnerships with agencies in an effort to collaborate on how best to offer ad slots to marketers – our native.ly service capitalises on the time we have spent developing partnerships like these.
This is where we believe programmatic meets native. At first sight, it might appear odd to attempt to marry the benefits of automation with customisation. If native is all about blending in with the environment, isn't this the exclusive preserve of the individually-created and placed ad? We believe it doesn't have to be. In the past two years, as we put together our native.ly offering, we've seen critical mass developing in terms of ad formats across various publishers.
What has really helped more recently is the development of a real time bidding protocol including native standards. This is facilitating an automated purchase of native like never before as it enables the different parts of the advertising technology ecosystem to standardize the way they transact.
We're also finding that mobile is proving to be a particular catalyst in the drawing together of programmatic and native. Global spending on mobile video is expected to leap by 30% to $13.3bn by 2020 (PwC). It's easy to see that we are moving in the direction of mobile becoming the main way consumers access the digital world, and that broadcast content is an increasingly effective way of communicating with them.
In this context, the data that publishers and agencies can derive about users offers a great opportunity for planning creative, as well as media placement. We think of this as Dynamic Creative Optimisation – integrating data on, for example, users' content consumption, audience segment, location and other contextual factors, in order to either create or update an ad in real-time.
Standardisation has helped marketers to reap the benefits of scale, while native has aided the process of improving users' responses to ads. Put the two together and the potential is huge.