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After Years of False Starts, True Native Offers Hope: Q&A with Kai Henniges, video intelligence

With GDPR around the corner, is first- and third-party data going to struggle? Kai Henniges (pictured below), CEO and co-founder of Swiss mobile video SSP video intelligence, believes that native is the way forward, as it works with existing page content, rather than relying on data.

Quietly creeping up on us for years, native video has emerged as a dominant force in digital advertising. The reason is a collision of factors – with video consumption habits and GDPR the final pieces of the puzzle. Video that is a real, natural fit to websites will be everywhere in 2018. The best examples of this is ‘true native’, as it immerses the user aesthetically, as well as content-wise.

I won’t to go into the details of how GDPR is going to affect us (though, let’s be clear, it’s going to shake the ad and martech industries to their core). But what we can be sure of is that it will make third parties’ use of data significantly more difficult. It’s going to affect what data we can use, and who can use it. Those looking to target – or sell – inventory based on data they don’t own have got to look for alternatives.

Kai Henniges, CEO & Co-Founder, video intelligence

Theoretically a surefire way to reach the right audience, first-party data has everyone under its spell. Knowing users’ interests and behaviour enables us to accurately predict whether they will convert. But it doesn’t seem to work as well as it should. There’s something missing…

Meanwhile, third-party data is imperfect too. It suffers from inaccuracy, can be diluted or full of gaps, and is expensive. After years of trying to overlay our marketing goals on top of it, we’ve made little tangible progress. Here, the companies that make their money from dishing out data for look-a-like modelling, or similar, will be watching GDPR nervously.

When accurate first- or third-party data is applied correctly, it can be effective – hitting the right people with the right messages. But too often we don’t account for context; and I mean that in both a physical and digital sense.

Physically, we should be considering factors such as whether a user is on their commute or at work, on desktop or mobile, and even on WiFi or on 4G. These are all often overlooked criteria that affect user behaviour.

Then let’s consider the digital context. The content of a page is our ally here. On paper, I may have the credentials of a tennis fan, but that doesn’t mean that when I’m reading the news I want to be sold the latest Wilson racket. But if I’m reading, you can be pretty certain that I want to know about tennis equipment. It’s worth noting Amazon’s purchase of the ATP Tour coverage – you can be sure they’re reaching tennis fans with ads in the right context.

Recently, I heard discussion about types of apps – if advertising is running on a ‘time-wasting’ app (games) it will have a higher attention rate than a time-saving app. This is just one such example. There are many of these considerations to make which don’t require traditional data, but do require contextual knowledge.

We’ve underestimated the power of context, and there’s one ad category that lives and breathes through context – native.

According to eMarketer, this year native ad spend passed 50% of total digital advertising spend; that will rise to 58% next year. We should take this figure with a pinch of salt, since it includes some very broad categorisation. The biggest chunk of native is social, where native really does feel native. Outside of social, the level to which ads are incorporated into the feel of their surroundings is more varied. The growth I expect to see is in ad units that are customisable, adapting to the different aesthetic of different sites.

For too long, clickbait sellers have given native a dodgy reputation. These kinds of platforms cropped up everywhere a few years ago, and still haunt many sites to this day. They not only look out of place, but their content is irrelevant, and untargeted. Native offers much more – but only when the content is relevant to that which surrounds it. This combination of matching look, feel, and content creates ‘true native’.

Social platforms have led the way, successfully proving the value of native video. Check your facebook feed these days and it’s hard to find anything except video; and of course LinkedIn joined the party just recently. These platforms used their knowledge of their users to make content hyper-targeted. They found that by making video a frictionless experience, engagement rockets.

We’re now well and truly in the age of video. In a way, given that text and image has been standard for so long, it’s remarkable that it’s taken us so long to get here. And where I believe it can be most powerful, is combining the three media tools of words, image, and video. Words (and image tags) allow us to learn about the content and tone of a page; and this information is a foolproof way of knowing a user’s interest.

So true native video works visually, it looks like it belongs, and contextually its subject matter is right for the content. The key to successful native advertising is making sure everything looks and feels like it belongs. This creates a better experience for users, which makes publishers happy. And if the advertising is matched closely enough to the content of the page, customers will thank you for it.

The combination of GDPR, machine learning contextual analysis, and ubiquitous video consumption creates an environment where true native video advertising can thrive. If we trust our instincts and let context determine our targeting, we have a formula for success. Next year will be make-or-break for digital advertising and the technology that drives it. We must start creating experiences that benefit users; native is the format to do that.