Native Advertising DSP: Programmatic Approach to Buying In-Feed Native Ads

Programmatic buying is breaking into the native advertising industry with IAB’s recent release of OpenRTB 2.3 and Native Ads V1.0 protocol for automated trading of media. The mission behind the release is to foster innovation in Real-Time Bidding (RTB) marketplace for native ads by providing a technology standard for companies to innovate around. By establishing this open, flexible, standard for the new ad format, in-feed native advertising, the programmatic ecosystem will see its rapid adoption amongst publishers and advertisers.

The fundamental difference of the new OpenRTB 2.3 protocol is that it allows for passing individual ad elements in a form of metadata, unlike banner advertising where a static image file is being passed. This allows for virtually infinite variability in what native ads can look like. A company that played a major role in defining the key elements an in-feed native ad should have is Facebook.

Over last few years we have seen several companies enter the native advertising industry. Their work primarily resembled that of an ad network—they juggled working with both publishers and advertisers. Even though native advertising implies integration and customization, every company needed some degree of standardization to grow the size of the publisher network they can tap into, on the premise of which they can attract more advertiser dollars. We’ve seen this happen to banner and video ad formats, and it is now happening in native advertising too—companies start shifting towards either supply-side to represent publishers (and become an exchange or an SSP) or demand-side to represent advertisers. This narrow focus is instrumental in avoiding the conflict of interest ad networks have—having to maximize revenue for publishers while driving the most ROI for advertisers. These conflicting goals can on be avoided in an open marketplace environment.

Native advertising is gobbling up budgets, but the novelty for the new format is quickly is wearing off and media buyers started to demand performance. It may have been sufficient to simply integrate a native ad in a contextually relevant environment 2 years ago, but in 2015 buyers want to make sure the right users see these ads. In fact, according to eMarketer, 70% of media buyers place audience-targeting as a top priority when buying native advertising. With the rise of native advertising exchanges such as AdsNative, PubNative, DistroScale etc., trading desks looked for a platform that would allow tapping into all of the exchanges for maximum scale, targeting and workflow efficiencies. Native Advertising DSP allows buying native advertising across all exchanges through one interface. Some of the most notable advantages of using a DSP to buy native advertising:

  1. Centralizing campaign reporting provides actionable data across all exchanges.
  2. Leveraging DSPs machine learning algorithms allows for optimization of campaigns across all exchanges towards one goal.
  3. Having full transparency on where the ads are running and the cost that is associated with buying native ads. Centralized platforms make campaign pacing decisions and budgeting easy.
  4. Applying frequency cap on all media buys. This eliminates scenarios in which a user is over-exposed to ads through different exchanges. Having a universal frequency cap ensures users that have converted on the site are removed from targeting across all exchanges and aren’t targeted over and over again.
  5. Buying advertising against 1st or 3rd-party data across all exchanges. This ties into the point above, of having tight control of what users are targeted, how often, and with what message.

Native advertising channel is an infrequent opportunity for brands to get an upper hand on their competition by scaling engaging content to build deep connections with consumers. With the wide adoption of automated ad buying, native advertising DSPs provides brands with a cutting-edge access point to serve native ads to their target audience at scale with full pricing and site-level transparency.

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