No one loves the banner ad. For advertisers, it’s creatively limiting – especially on mobile – and it can be hard for consumers to see or pay attention to it. Publishers find it clutters their sites, and the more advertisers make it try catch consumers’ attention, the more it clashes with their content.
The banner ad dominates display advertising because, as a standard format, it enables advertisers to serve the same creative to hundreds or thousands of sites at once. Programmatic, after all, is about efficiency and scale. But what if there were a way to programmatically deliver ads customized to every site where they land? Submit just one ad, and automatically generate a dozen others that match each site’s style and layout?
That’s the idea behind native programmatic. Advertisers bid or buy just as they would on a standard programmatic display platform, but instead of uploading a completed jpeg image to be served to purchased placements, the advertiser submits a collection of separate elements – usually preview images in several different dimensions, a headline and a short description. The ad server automatically fits the elements into a publisher-created ad unit that matches the site’s content, with a “sponsored” tag in the corner.
Native’s great, but how do we scale?
It might seem far-fetched, but a handful of ad tech players are already doing it. In February, Toronto-based tech company Collective Roll launched StackAdapt, an open exchange that auctions native inventory. Originally a demand-side platform, Collective Roll developed the exchange to meet demand for native inventory from its buyers, according to co-founder and director of ad operations Ildar Shar. “If there had been enough supply out there, we would have just concentrated on the demand side, and become the world’s first native advertising DSP,” he says. “Our main challenge was that that ecosystem is totally not there.”
Publishers design their native ad units using Collective Roll’s proprietary editor app, setting the size and placement of the unit and then choosing the elements that advertisers have submited. One of the parameters is a page to link to, usually hosted on the advertiser’s site or a third party. Shar says that in the spirit of native advertising, Collective Roll encourages advertisers to link to branded content, rather than to a flier or full page ad.
“Let’s say you go through The Globe and Mail autos section, and there will be Ford, advising you how to choose the best family car,” he says. “If it’s hosted on the publisher end, that’s additional red tape. It usually takes some time for the editorial teams to approve that, to tweak it. … It’s much quicker for Ford to just own that media on their own property, and use all the publishers as a distribution platform.”
StackAdapt is still just out of beta, and the next big hurdle is getting Canadian and U.S. publishers on the platform. Shar says he’s seen interest from big publishers like Forbes and the Toronto Star, as well as a lot of smaller publishers and long-tail networks. “Hopefully by the end of Q2 big agencies like Xaxis, Cadreon or Accuen will be able to use it at scale.”
While StackAdapt focuses on desktop display inventory, there’s also a lot of demand for native mobile solutions, since mobile banner ads can be difficult for users to read. In February OpenX, a major U.S.-based exchange that serves 250 billion impressions monthly, launched Native O|X, a native programmatic platform specifically for mobile apps.
It works on the same principle as StackAdapt – advertisers submit ad elements, and OpenX’s mobile SDK automatically translates it into an ad unit designed by the app developer.
Rob Kramer, OpenX’s general manager mobile, says Native O|X inventory is primarily in-stream ads, similar to native mobile ads on Facebook or Twitter. So far, two mobile publishers are plugged into the platform, and Kramer says OpenX has about a dozen other publishers lined up to sell inventory. If the platform is successful, OpenX plans branch out to mobile web and desktop display as well.
We did native before it was cool
Probably the most experienced native programmatic player is TripleLift, a New York outfit launched in 2012 by three former AppNexus employees. CEO and co-founder Eric Berry says that back then, it was called “sponsored image” advertising, since the native bandwagon didn’t get rolling until early last year. Like OpenX and Collective Roll, TripleLift also launched its native exchange in February.
TripleLift’s big value-add is its proprietary computer vision software, which scans publisher sites, figures out what counts as “content,” and auto-generates an ad template that fits into the site’s content stream. It’s been used by major sites like The Daily Beast, FoodGawker and Elite Daily, and by advertisers like Gap, Gucci and Nissan.
Berry says publishers are attracted to native programmatic because it offers the efficiency and sales boost of programmatic, but without cluttering their sites. The flip side is that they worry about ad quality — automated native placements have earned a reputation from content recommendation engines like Taboola, with its anti-Obamacare ads and links to banner-blanketed scam sites. Native ads have to above all be relevant to the readers, otherwise they risk detracting from the publisher’s brand.
TripleLift offers publishers an ad quality guarantee, as well as whitelists, blacklists, brand sensitivity filters, and other tools that premium supply-side platforms give publishers to control ad quality. But advertisers have worries too. With native programmatic, marketers and agencies give substantial creative control over to the publisher and the platform. If the ad server makes a mistake, or if they don’t submit the right kind of elements, the ad could be unreadable or the image could show up out-of-frame. That means they need to have a lot of trust, since they won’t always get to see what the final ad looks like on the publisher’s site.
Berry says that TripleLift is committed to making sure advertisers’ ads look the way they’re supposed to. He gives the example of Nissan, known as a very selective digital advertiser. On a recent campaign, his team worked to ensure that the logo was visible in all of its native placements, and that the preview images were dimensioned properly to show the entire car.
Brand marketers and publishers alike would prefer an alternative to the banner ad that maintains the efficiency of RTB or programmatic direct. Some have seen that in video advertising or rich media, though the price point for those placements can be much higher. As customization technology improves, native may come to dominate the display programmatic space. For now the technology is still nascent, and it’s hard to image mainstream Canadian brands being anything but cautious until the technology’s been proven.
But for the brave early adopters, Collective Roll, OpenX and TripleLift all host Canadian inventory, and are open to Canadian publishers.