Programmatic: Native Ads’ Biggest Hope and Threat

When it comes to buying and selling digital advertisements, upfront decisions no longer have to be made with lowball glasses of scotch. Brands continue to simplify the process of getting their content to publishers, and now that programmatic advertising and native content are coming together, the decisions will be made quicker and cheaper.

But as opportunities get cheaper, combining the two sides may force middlemen like sales teams and third-party content marketers outside of the creative process, turning some Mad Men into Unemployed Men. Brands and publishers that use programmatic ads are approaching a critical intersection when it comes to the future of native content: Will they continue to create more high-quality content, or will programmatic’s growth clutter traditional news feeds with too many subpar sponsored posts?

Programmatic advertising, the automated auction process of purchasing and distributing online ads based on algorithms about customer value, has quickly become a dominant force in the industry. But every day, we ignore shoddy banner ads that target us programmatically through our cookies and search history.

Native advertising gives the consumer more reason to engage, since brands and publishers work together to create sponsored content that closely resembles the format and tone of the site its featured on. However, as the theory goes, native’s focus on creative collaboration makes it hard to scale.

Nativo is one programmatic platform that offers brands and publishers a way to scale native automatically rather than making them strike deals individually. This means engineering native ads to seamlessly fit into feeds of the 1,700 publications that use Nativo’s services — including USA Today Sports Media Group, Reader’s Digest, and Hearst Newspapers. What makes Nativo’s technology special is that brands can also programmatically distribute both full homepage placements and article pages onto publisher sites, instead of just a homepage unit that links to an article page on a different site. Gillette, for instance, could automatically place their “Pressure Points” web series on ESPN.com.

It’s an exciting and potentially game-changing technology, but whether that metaphorical glass of scotch is half-full or half-empty largely hinges on one factor: Will brands maintain the quality of their sponsored posts once they’re able to place them on different sites automatically and are no longer getting intimate guidance from the publishers they work with?

“We’re finding that contextual relevance with a display ad is completely irrelevant,” said Chris Rooke, SVP of Strategy and Operations at Nativo. “But contextual relevance when you’re distributing content is everything.”

At the moment, programmatic and native content mesh well together because both are experiencing surging growth. In 2014, eMarketer estimates programmatic spending will reach $4.66 billion, a 38.4 percent increase from 2013. By 2017, programmatic spending could surpass $9 billion. Native ad spending is expected to jump from $1.6 billion in 2012 to $2.85 billion this year.

Increased budgets means more programmatic opportunities, but, too much of a good thing can be bad for business.

Joe McCambley, cofounder and Creative Director of The Wonderfactory, told Adweek he believes “demand for native content will outstrip the supply of creative talent” in 2014. “Customers will begin the inevitable process of learning to avoid native content the same way they’ve learned to avoid banners, email ads, radio and TV ads, and direct mail.”

Rooke believes that sponsored posts will disrupt the display industry as native grows; after all, publishers need to clear room for these new ads. Eliminating banner ads would be a refreshing change, but could we be looking at a native bubble inflated by programmatic technology? It’s possible, especially if overexposure leads to diminished quality.

There are also other threats to watch out for. For example, what if a corporate giant like Unilever hijacks the news by rapidly creating content Nativo distributes all over the Internet? A brand could essentially push their own version of the Associated Press that overwhelms news feeds.

“Though it may be inconsequential if Purina sponsors 25 cuddly cat pictures on Buzzfeed, it could be scarier if a political advertiser started pushing sponsored content throughout the web,” said Prosperio co-founder Henry Lau, who connects publishers like Forbes and Mashable to programmatic ads.

But to prevent any brand from monopolizing native news feeds, Rooke stresses the need for balance and editorial control. “You have so much real estate and you want to make sure there’s a good equilibrium between editorial content and anything else you put on the page. From a publisher perspective, you’re going to want to maintain that balance.”

We’re at the programmatic nexus, that familiar point when creativity can lose its value as it becomes widespread. Ultimately, the future of native will be in the publishers hands. Will they exert the same standards over sponsored content as they would any editorial?

“If we enable a bad user experience within these placements, that’s bad for everyone,” Rooke said. “The content must behave like the editorial content around it. It’s in our best interest and the publishers best interest to protect that integrity.”

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