A Primer on Native Advertising

Native advertising is the new “in” thing in digital advertising. So much that last year everyone (according to eMarketer, 73% of online publishers now offer native capabilities) is now talking about Native Advertising.

In this blog, I thought I’d cover the basics on what is Native advertising and the issues restricting its widespread adoption.

So, what exactly is Native Advertising?

Native advertising is the ability of the publishers to insert strategically placed ads within content and make it feel like it is a part of content. Facebook Video ads within Newsfeed, Newsfeed Ads, and Gmail ads are all a part of Native advertising.

Native Advertising is still small but it is poised to be a big opportunity.

Native advertising spends small are growing. According to eMarketer, marketers expect healthy native ad spend.

Growth is happening thanks to a) Large social platforms like Native and Twitter who push through adoption of richer native formats like Autoplay video.

b) Adoption of Native formats by smaller publishers in an effort to drive premium ad dollars on their inventory.

Certain native formats can be very engaging.

Certain native ad formats command higher premium CPMs (like Facebook Video) and tend to outperform their display advertising peers thanks to its stronger engagement metrics as a result of strategic placements (embedded within content).

While other formats suck

Some of the more common ad units used by the native ad players like Outbrain, Taboola are what I would describe as the exact opposite of engaging. These Ad units are entirely text / picture in an article format.

Given that they have a) limited supply and b) limited demand these ad units often look like click bait and almost always behave as the same. We can only hope that the situation will improve when these formats become more engaging and the demand (or rather the supply of ads becomes common).

Native ad format standardization is still an issue

A quick look at the players will tell you that Native ad formats are plenty and standardization is still an issue. While IAB has a set of recommended IAB formats, industry wide adoption is still an issue and many large players continue to make their own formats. The pain is really felt by the advertiser because media managers have to reformat ad creatives to these dozen different formats that are not a part of the standard ad spec.

Contextual relevance becomes more important than ever before

For article based ads, it becomes more and more important to target them within contextually relevant pages because without that, users can be confused because articles can completely look out of context driving lower engagement by the user.

What could be done to improve Native Advertising?

There are several things that could be done by the ad tech industry to improve the adoption of Native advertising.

1. Standardize the creatives: This is the single most important thing that they can do and if they are unable to do this, they should atleast introduce tools that make it easier for the advertisers to be able to produce different kind of Native ad formats / sizes with ease

2. Make native ads, suck less: Native ads suck and that is a fact. The ad industry needs to work hard on the promise of embedded content style ads that are also highly engaging, making them suck less so that they can deliver value to both the users as well as the advertisers.

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