Audience extension is defined differently based on who uses the strategy.
For Publishers, Retargeter defines it as a technology [or strategy] that allows digital publishers to generate revenue from their web traffic by allowing advertisers to reach their audience far beyond their website. In this case, Retargeter leverages retargeting technology to reach the users who come to the site.
For Advertisers, 1st and 3rd party data is largely used to model a specific audience, and source similar users across the web.
These are strategies that have largely been associated with banner advertising until programmatic buying came to native advertising. Now that IAB released OpenRTB 2.3 specs to support native formats, native advertising continues its rise to prominence. So how can the audience extension strategy be used in the context of Native Advertising?
Why do brands need audience extension?
The answer is quite simple: to get more users engaging with the content they have invested money to produce! It's impossible to say how much the average cost of producing content is, since it ranges so widely - from long-form video to microblogging. But one thing is certain; it is much more expensive than a banner ad. And with that in mind, brands start to understand that it is not a sustainable strategy to simply keep pumping out content. They need to maximize the use of it and squeeze every last bit out of it. (Have you already read HubSpot's Guide to Writing Well? It's been out for years and has brought thousands of leads for the company). Bottom line, avoid wasting invested money: if the content is good, you need to make sure you squeeze every last bit of value out of it.
The first thing a brand needs to do is produce the content. There are two ways to go about that:
- The brand can work with the publisher's editorial team to produce sponsored content (often called custom content) that is then hosted on the publisher's website. Think of the collaboration between The New York Times and Netflix to promote the series, Orange Is The New Black.
- The brand can produce the content in-house and put it up on their content hub, blog, or microsite. Such content is often referred to as branded content.
Content discovery comes next.
How can you get your content discovered? In-feed Native Advertising.
We can't repeat this enough - Content is King and Distribution is Queen [King Kong].
Native Advertising is commonly seen as a distribution channel to reach audiences with content. Regardless of where the content is hosted—on a publisher's website or a brand's content hub—native advertising can be used to source audiences across the web to get them to engage with the content. Similar to Facebook or Twitter as distribution channels, native advertising delivers a snippet of content that gets users to the site for the full engagement experience.
Audience extension through native advertising can be executed either through an ad network or through demand-side platforms, which have experienced a massive increase in usage, from 25% in 2013 to 44% in 2014 (eMarketer).
In either case, the audience extension is priced on either CPM, CPC, or CPE models. While advertisers may be inclined to buy native ads based on the engagement with content, we see that in order to promote content on premium sites, CPM or CPC models are more common.
(You can read our story on native advertising pricing for the full insight into how to buy native ads.)