Going Native: Why Brands Are on the Brink of Better Advertising

The future is bright, the future is native. Dr. Bill Simmons (pictured below), CTO and co-founder, DataXu believes native advertising is the obvious solution to some of the challenges digital advertising faces today. Writing exclusively for ExchangeWire, he explains how technological advancements and improved industry standards should make native advertising a very attractive prospect for advertisers.

We’ve all had to close dozens of tedious pop-ups in one go, or endure those lurid, flashing banner ads that induce migraines. In the murky beginnings of digital advertising, there was no rulebook, so the digital space became busy and abrasive, with ads preventing consumers from accessing the content they wanted.

Thus, ad-blocking software boomed, and today, 22% of people in the UK use it. Frustrated with irrelevant, invasive advertising, consumers have made their voices heard, but not without serious consequences for brands. In fact, UK brands risk seeing this year’s record £5bn Christmas ad spend partially squandered. Globally, ad blocking could cost publishers £28bn by 2020.

So, it may seem surprising that so many key industry players still believe it’s possible for advertising to live alongside content in harmony – and that great user experience and high publisher revenue aren’t mutually exclusive. The ad-blocking war, they argue, can result in victory for both sides. But how?

Native’s rise to fame
Dr. Bill Simmons, CTO & Co-founder, DataXu

Dr. Bill Simmons, CTO & Co-founder, DataXu

Native advertising promises to open the door to a future of better advertising – for brands, publishers, and consumers alike. Native ads blend in seamlessly with the editorial environment, matching the form and feel of the publication on which they are placed. It’s a win-win-win scenario: viewers get an enhanced user experience; the brand gains the publicity it seeks; and the publisher retains its ad revenue and traffic.

Native’s popularity isn’t simply a result of the benefits it brings. Our digital behaviours are changing, and native can keep up with them better than older formats ever could. As mobile and social become increasingly important, display media’s share of the pie is dwindling. Instead, consumers are spending more time browsing social feeds on platforms like Facebook and Twitter; and that means they are more likely to engage with sponsored posts than banners.

Native is also stunningly effective. According to ShareThrough and IPG, 25% more consumers look at native ads than banners, and this rises to 52% for consumers looking at them over display ads. Moreover, native ads register an 18% lift in purchase intent over banner ads. They function well on mobile, too: 97% of mobile media buyers deem native ads very, or somewhat, effective at attaining branding goals.

But the benefits aren’t just for brands. Publishers struggling to monetise their digital content can also reap the rewards. In an International News Media Association (INMA) survey, 89% of publishers surveyed say native advertising is important to their organisations.

A bright future ahead

Until recently, native ads were primarily traded through direct channels to ensure they were a good match for the website’s subject matter. But, in March, the IAB launched OpenRTB Native 1.1, guidelines that have standardised the real-time trading of native and paved the way for widespread adoption. Now, major ad networks and exchanges offer native ad trading through programmatic channels.

As the advertising industry continues to go native, what benefits and improvements can we expect?

1. Native ads traded programmatically can be targeted with precision. With help from first- or third-party data, marketers can use native to make sure their ads are placed in front of a highly specific subset of consumers.

2. Programmatic native is also highly adaptable to the user experience, and various versions of copy and creatives can be plugged into a single campaign. The exchange automatically selects the image and text based on where the impression will be served to find the best fit for both the publisher and the viewer.

3. Standardised and selected automatically, native ads are easier to execute than non-native ads, so marketers can enjoy improved efficiency. And, with copy and creatives ready to be plugged in according to the use case, programmatic native campaigns are highly scalable.

The IAB’s official native guidelines were only released last spring, but the ecosystem is ready for native at scale. By embracing this latest industry standard, brands can win back the trust of consumers who rightly feel that user experience had slipped too far down on the list of priorities.

Business Insider Intelligence forecasts that, in five years, native display will account for 74% of total US display ad revenue. With so much to gain from trading native programmatically, brands in the UK should make sure they aren’t far behind their American counterparts.