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Measuring the Effectiveness of Native Advertising

Native advertising has quickly become the emerging and most potent new channel in the digital arsenal of media buyers and planners. It is essential to fully and completely understand where this new method fits into the consumer funnel, and also to understand how to properly measure its effectiveness at achieving campaign objectives.

Establishing the framework to measure the effectiveness of Native Advertising will help this new channel to increase its adoption among media executives and our most important account clients. We’ll outline the foundation of this framework to measure the effectiveness of Native Ads. 

1. Utilize platform-specific tracking and optimization: conversions, time on site, engagement.

Given a growing number of options media buyers now have when they choose a native advertising provider, it’s critical to ask what kind of measurement capabilities the individual platform has. What separates the best from the rest?

Most platforms use the common measurement of “ad impression” quality and effectiveness built in. These can be metrics such as ad viewability (%), ad viewability time(s), brand safety, non-human traffic, etc.  Or, these metrics can be easily obtained by attaching a variety of measurement and verification tags from 3rd party providers. Properly analyzing this data: media buyers will learn a indispensable amount of valuable information about the quality of native placements which they have in the market.

Besides this, some platforms now offer analysis beyond the click. It can be something as simple as installing a conversion pixel (tailored to a specific action on the site), or something more sophisticated, such as getting a platform-specific analytics pixel that can measure things like average time on site, page views, content shares, new vs. return traffic, etc.

The bottom line is that it’s critical to fully understand what each platform has to offer and take full advantage of all capabilities. As the AdTech market grows the defining factor determining the winners for digital dollars from Brands and Agencies alike are the functionality and features offered by each platform.

2. Use click-macros to get as much information from the click as possible – domain URL, etc. 

This can be an alternative solution when it’s not possible to place any type of analytics pixel on the page.

Click macros are essentially small pieces of program, code that can be inserted into the destination URL (either manually or automatically), and they pass some critical information about the click to the site’s analytics software. It can be very valuable information such as the domain URL, geo location of the click, product price, etc.

This will provide a more detailed breakdown of the overall traffic from this native ad provider, and help media buyers make some optimization decisions; for example, allocating more budgets to specific sites based on “average time on site” analysis.

3. Split Test Everything!!

In any and all marketing campaign there are a lot of variables coming from a variety of angles.

  1. On the (native) ad level – there is an image, headline and a body text (for the majority of native units).
  2. On the placement level – there is an option of serving on thousands of sites, on various contextual verticals, etc.
  3. On the targeting level – there are interest segments, device types, frequency caps, day parting, etc.

Older marketing wisdom states: target the right user, in the right place (environment) at the right time. So it’s not hard to imagine that a small tweak in the combination of those variables above can affect the campaign in a really big way for a huge advantage.

These days the majority of campaigns can auto-optimize now. For example, platforms can take a large number of combinations (obtained by mixing different variables), serve them at an equal weight, and then focus on the best combinations.

The simple advice here is to pick at least three variables of each element (three images, three headlines, three body text elements, three contextual categories, etc.) and serve them at an equal rate. This will provide an enormous amount of learnings for future campaigns.

 4. Holistic view of digital – utilize Path to Conversion Analysis

The last piece of advice–and arguably the most sophisticated one–is to take a holistic view of all your digital initiatives by utilizing the path to conversion analysis. In the simplest terms: this is done by “tagging” all your digital channels with time-stamped measurement tags. The majority of ad servers provide this type of analysis these days to help as well.

This way, every time a specific ad unit is served or clicked on (depending on the attribution model), this is being recorded, and can later be analyzed to understand how the customer interacted with various channels on the way to converting.

For instance, you can see that a customer first interacted with banners (with or without clicking), then read a piece of content on the brand’s page by following a native ad, was later exposed to re-targeting banners, and then found the product page through search and converted.

 This type of approach–when you make data and measurement the central piece of any campaign–allows media buyers to learn from existing campaigns and improve on future ones.

These methods have been tried and tested and marked for success on our end and is the best approach in the new data-driven marketing world.

4 min read

Trends That Gave Rise to Native Advertising (Featured on Marketing Magazine)

Digital advertising evolution: a closer look at the fundamentals. Piece originally appeared on Marketing Magazine

In 2015 the term that undeniably takes centre stage in the digital media world is native advertising. Even though many marketers continue to battle over exactly which advertisements should be called native, the fundamental premise is the same: uninterrupted delivery of content produced by or in collaboration with a brand. To understand why native advertising gained such momentum over the last couple of years, we ought to look at the underlying industry trends that will continue to shape native advertising as one of the dominant digital media channels.

Shift to values-based advertising

When advertising first emerged, the main focus was the list of its features to differentiate it from the competition. However, as more companies started competing for consumer attention, it became evident that it is impossible to win the ‘feature war.’ What more progressive brands came to realize is that in order to win consumers over, they had to connect with them on a level deeper than just transactional. The emergence of social media, which allowed brands to shift from a monologue to a two-way conversation with consumers, presented an opportunity to engage with consumers by showing shared values and being more human. The democratization of such powerful distribution channels allowed even smaller companies to show their human side. Take Green Shoe Studio, a production company based in East Peoria, IL. Instead of focusing on the capabilities of their recording studio, they instead showcased their values by allowing an elderly man to record a love song in tribute to his wife. This short documentary generated millions of views on YouTube.

Shift to Pull Marketing

According to a study done by the National Center for Biotechnology Information, the average attention span has dropped from 12 seconds in 2000 to eight seconds in 2013—a second shorter than that of a gold fish. This comes as no surprise, given that the typical Internet user is exposed to up to 3000 advertisements a day (Huffington Post). As a result, more brands see the value in finding ways to get users to discover them in order to stand above the crowd of competition that aggressively pushes their messages at consumers.

Such thinking gave rise to the concept of content marketing: a strategic initiative of creating content that delivers value beyond the core product offering. The underlying magic of content marketing is that it delivers value in a non-interruptive manner. “Instead of pitching your products or services, you are delivering information that makes your buyer more intelligent” (CMI). According to the Content Marketing Institute, over 90% of all companies now invest in content marketing. As the creation of content increases, so does the need for scalable distribution channels.

Brands start to think like publishers

Traditionally publishers approached their monetization by building an audience and then selling opportunities to engage with their audience to advertisers. Prior to the wide adoption of social and native channels, brands in turn relied heavily on these publishers with their established distribution channels to reach their consumers with content. However, with the proliferation of the aforementioned digital distribution channels, brands began to realize the efficiencies in reaching the right audience that these channels have created.

Instead of relying just on the audience of a particular publisher, brands take a publisher-agnostic approach to distribute their content through programmatic native advertising technology partners. By producing original content and hosting it on their properties, they are able to cherry pick the audience of interest and drive users to this content. Native advertising channels emerge to complement closed social media networks and reach users with branded content across the web.

Everything goes mobile 

The current challenge that markets face is that most of the Internet, together with the advertising solutions to monetize it—banner ads—have evolved around static web. The nature of mobile content consumption rotates largely around the concept of infinite scrolling, similar to that of large social networks like Facebook. This evolution called for new ad formats that are integrated ‘in-feed.’ The historical solution for mobile has been tiny ads (300×50) that don’t provide enough room for delivering a brand message. On top of that, over 50% of clicks are reported accidental (Business Insider).

Today, well over half of Canadians own a smartphone (Catalyst) and their mobile usage grows exponentially. Mobile data traffic is expected to grow 762% by 2018 (Financial Post). As expected, advertisers see this growing appetite for mobile usage as an opportunity to reach consumers on the go. The strong demand for new ad formats to address the evolved nature of content consumption on mobile devices, called for a solution that would link the marketing message to the user experience.

First pioneered by social networks and search giant Google, we are seeing native advertising strategy being widely adopted. As per a study done by eMarketer, 73% of US media buyers now invest in native advertising. And rightfully so; according to a study done at IPG Media Lab, native advertising beats banner ads on every engagement metric, from increasing brand favorability to a lift in purchase intent.

4 min read

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. Appling 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.

4 min read

Programmatic Native Advertising Platforms vs. Native Ad Networks

The native advertising industry continues to boom. In the US alone, eMarketer predicts $4.5B in 2015 to go towards content sponsorships, native ad integrations, and programmatic native channels. What is particularly notable is the growth rate. The industry that piggybacks on the massive trend of content marketing, is expecting to grow 45% from 2014, and continue growing at the 25% rate for 3 years after.

It is not surprising that more marketers are catching up on the terminology trying to make sense of the ever-evolving landscape of digital advertising. It seems as though new companies claiming to do Native Advertising is popping up every week, and as more buyers starting to invest in it for content distribution, more clarification is needed to distinguish the two fundamentally different buying and selling concepts: Programmatic Native Advertising Platforms vs. Native Ad Networks.

Native Ad Networks

A natural stage in scaling new ad formats a.k.a. solving ‘chicken and egg’. It always starts the same way — buyers want to buy a new ad format which isn’t available on publishers’ sites since they don’t yet see the dollars for such ad formats. Ad networks help aggregate supply and demand to start pushing new formats forward.

Ad networks dominated early 2000’s in banner advertising, and Native Ad Networks were brands’ go-to partner to buy and sell native until late 2013. Traditionally they are characterized by working directly with both publishers and advertisers. While this is certainly a step up from having advertiser directly reach out to publishers for advertising campaigns, Native Ad Networks are limited by:

  1. Conflict of Interest. Advertisers look to get the lowest CPM rates, while publishers look to get the highest CPMs possible. Ad networks have to constantly juggle the two sides without bringing 100% efficiencies to just one side.
  2. Arbitrage. Ad Networks don’t operate on dynamic CPM model, hence, there are opportunities for arbitrage and sky-high margins. An Ad Network negotiates the CPM price for ad inventory, which it later resells to advertisers.
  3. Limited scale and targeting. Because inventory price is pre-negotiated, impressions are not sold on impression-by-impression level. Which means advertisers pay even for users they aren’t interested in advertising to.

Aside some obvious drawbacks, Ad Networks bring value in offering custom units that aren’t often sold through programmatic channels. They also are able to guarantee impressions, which platforms can’t do in a real-time bidding environment.

 

Programmatic Native Advertising Platforms

Unlike ad networks, platforms are characterized by:

  1. Focus. Represent either supply-side (publishers) or demand-side (advertisers). This allows a platform to have laser-focus on maximizing returns for the party they represent. Publishers make more money with supply-side platforms (SSP), while advertisers get stronger return on investment when working with demand-side platforms (DSP).
  2. Real time. Buying and selling of Native Ads happen on impression-by-impression level in a real-time bidding marketplace type of environment. This allows buyers to leverage 1st and 3rd party data to bid only on an audience of interest. For example, being able to buy native ad impressions only for males 25-34 in Toronto who are actively looking for a new mid-size vehicle.
  3. Tight control over impressions. Programmatic platforms allow for frequency capping to ensure users aren’t overly exposed to the same message. This ensures good user experience on publisher site, as well as strong ROI for advertisers.
  4. Scale. Because programmatic platforms are heavily relying on technology, their buying and selling capacity is much more scalable. That mean DSPs can work with dozens of Native Ad exchanges to buy native ad inventory, and SSPs can plug into dozens of DSPs to sell native ads.
4 min read

What Is a Native Ad?

When we start diving into the topics of Native Advertising, it comes as no surprise that the fundamental question that needs to be answered first is: “What is a native ad?”; and this is the question that we’ll kick off our series with. First, let’s try to distinguish two similar sounding terms — Native Advertising versus a Native ad.

  • Native Advertising is a strategy to seamlessly present branded content to a consumer.
  • Native Ad is the product of the strategy.

Native Ad is a paid advertisement that resembles the form of the content that appears on the publisher property or a platform. As a strategy Native Advertising is largely dominated by content-driven message from an advertiser. An advertiser produces branded content (articles, videos etc.) or works with a publisher’s editorial staff to develop sponsored content, and then seeks ways to distribute it to reach the target audience. (Stay tuned for follow up posts to learn more about the difference between Branded and Sponsored content). To get the content in front of the target audience, an advertiser can approach Native Advertising in two forms of the ad units:

  • Distribute branded content through snippets of content preview natively integrated in the publisher’s site or a platform.
  • Integrate sponsored content entirely on the publisher’s property.

Here is an example of an ad (content preview) on a social media platform. Volkswagen works with Twitter to drive users to their content hub:

 

Content snippets are called In-Stream Native Ads. Here is an example of this unit from ContactMonkey on a publisher’s property:

 

Here is the ad that comes in a form of sponsored content that is fully integrated in the publisher property. GE works with The Economist in this example:

 

To summarize, a Native Ad, regardless of where the content is hosted, is an advertisement that preserves the ‘look and feel’ and closely aligns with the property that it is displayed on.

Native Advertising is a way to present either entire sponsored content or a snippet of the branded content. The fundamental differentiator of Native Advertising is that unlike other forms of disruptive advertising (think popup ads, or page takeovers), it presents advertiser’s message without interrupting user experience on the site or platform.

4 min read

Creating Great Video Content. The ‘Goose Bump Test’

The first time I heard about the ‘goose bumps test’ was when I listened to one of my favourite radio shows, Essential Mix on BBC Radio 1. A former megastar electro ensemble, Swedish House Mafia, explained that they use it every time they write music. “Goose bumps never lie” – claimed the musicians. (Listen to that show here.)

Back in 2010 I didn’t think much of it, but as time passed ‘Goose bumps never lie’ started to mean a lot more, now that I am trying to dig deeper and deeper into the topic of content creation and distribution and understanding how users engage with brand messaging when it is presented in an interruptive format (pre-roll, pop-up, interstitials) vs. involvement (native advertising).

First thing’s first, why do we get goose bumps when we listen to music or watch a video?

‘In 2001, neuroscientists Anne Blood and Robert Zatorre at McGill University in Montreal provided an answer. Using magnetic resonance imaging they showed that people listening to pleasurable music had activated brain regions called the limbic and paralimbic areas which are connected to euphoric reward responses.’ – BBC.co.uk

‘A Team of Canadian researchers suggest that when we are moved by music, our brains behave as if reacting to delicious food, psychoactive drugs, or money. The pleasure experience is driven by the “reward” chemical dopamine, which has been linked to addiction. It produces physical effects known as “chills” that cause changes in the skin’s electrical conductance, heart rate, breathing and temperature.’ – cmuse.org

So it comes down to two elements when it comes to creating content – be it video or music – that evokes goose bumps: buildup and a sudden change. It is all about tricking the brain into thinking that it knows what is coming up and then introducing a sudden change – new instrument, new plot line, unique perspective to a common topic etc.

Let’s see it in action. This recent Nike ad from Wieden+Kennedy takes a unique turn during a basketball game:

 

P&G puts things in the perspective in this touching video:

What is interesting is that sad themes that give you goose bumps can often induce positive feelings. ‘One of the most intriguing explanations for music’s “chill” effect has been offered by neuroscientist Jaak Panksepp. Neurobiologist Jaak Panksepp found that people more often feel chills or goose bumps when listening to music when the music evokes a sad feeling or is compounded by a sad memory, as opposed to happy feelings or positive memories. He thinks this may be due to evolution – this response may be similar to those our ancestors felt when they heard the cry of a lost loved one bringing about a desire for close physical contact and keeping families together.’ – Mental Floss

And to prove that you don’t have to be a mega brand to create content that is both amazing and touching, here is an example of an amazing piece created by a small shop – Green Shoe Studio:

4 min read

Marketing Magazine names Vitaly Pecherskiy to its 30 under 30 list

The StackAdapt team is very proud to have our Co-Founder, Vitaly Pecherskiy, named as Marketing Magazine’s 30 under 30.

Below is the entry, as published by Marketing Magazine on October 7th:

Last year Vitaly Pecherskiy set out on a mission to exploit the intersection of native advertising and programmatic media. He co-founded StackAdapt, a platform for publishers to create custom ad units that match their editorial content and put them up for auction on a real-time ad exchange. The only native programmatic company in Canada, StackAdapt represents 3,000 publishers globally, and has worked on campaigns for Ford, GE and Sport Chek.

“Vitaly’s not afraid of thinking big and taking the risks necessary to accomplish those big-thinking goals,” says fellow Toronto entrepreneur Alex Smith, founder of ContactMonkey. “He’s definitely not risk-averse, and he’s thought a lot about how to grow a business very large.”

Like a lot of entrepreneurs, Pecherskiy’s entry into emerging tech was serendipitous. He immigrated from Russia initially to attend school at Lakehead and the University of Ottawa, receiving a degree in finance, and then settled in Toronto to look for work. Down the street from his home was a hot social ad startup called AdParlor. Pecherskiy knocked on the door, chatted with some folks, and ended up with a full-time position.

A year later, AdParlor was acquired by AdKnowledge, a global digital ad network. Pecherskiy moved on to Xaxis, the programmatic trading arm of WPP. There he met Ildar Shar, a fellow Russian immigrant working at Mindshare, and got to talking about the industry’s weak points. Web advertising was fundamentally flawed, they agreed – ads weren’t performing, consumers weren’t engaging, and at the end of it all, advertisers just weren’t that interested.

The problem was the web’s dominant advertising format – the banner. It’s boring, irrelevant, ignorable. Yet advertisers have come to rely on it as the best way to get large scale for low cost.

Pecherskiy and Shar left WPP in 2013 to investigate the problem, together with Yang Han, an engineer who’d just finished working on real-time stock trading technology at Bloomberg. At first they tried to save the banner – finding ways to adaptively scale it or change its size to better fit its context. But eventually the team realized that the banner would have to be thrown out.
“It’s fundamentally not performing,” Pecherskiy recalls. “So we thought maybe we could take on something more challenging, more speculative. Take a little bit more risk, but then build something that could potentially change the way advertising is done.”
Their solution was a native ad unit that adapts all its parameters – font, size, colour scheme, even content – to the content around it. Advertisers would submit raw text and images, which would be poured into a template designed by the publisher to match the design of the site.

Programmatic was the natural next step. The process for translating advertiser input into finished native ads was already automated – which meant it could be tacked on to automated ad buying. Pecherskiy and Shar decided the platform to implement their solution was a real-time programmatic ad exchange, where buyers could bid on the most relevant and cost-effective placements, using data. With enough publishers on board, an exchange could give buyers access to a mountain of specialty native units across hundreds or thousands of sites.

The StackAdapt platform rolled out in spring 2014 (then under the name Collective Roll), and has since grown to 15 staff and launched a U.S. office. Pecherskiy, as VP publisher relations, was (and still is) in charge of building out the exchange’s supply base. Since then he’s roped several thousand publishers into adding StackAdapt’s native units to their sites, like Songza, Jango and The Christian Post.

As native advertising gains steam in the digital ecosystem, Pecherskiy’s confident he chose the right corner of ad tech. “The trend that I think is really going to make a difference in the coming years is the shift from disruptive advertising towards involvement advertising,” he says. “Users no longer respond to direct-response messages where they’re being bombarded with ads… that whole approach is dying out very fast. I think the future of advertising lies in brands producing engaging and meaningful content, where they enrich users lives.”

4 min read

StackAdapt Raises $900K To Fuel Growth

StackAdapt announces $900K seed round. Additional capital will help fuel StackAdapt’s growth and help bring its scalable Native Advertising technology across the web.

Ildar Shar, CEO:

I am excited to announce today that we have closed our Seed Round of financing. Aside from receiving external validation for the work that we have done to date at StackAdapt, I am thrilled to see the rapid change in the online world. From the raw and somewhat chaotic Internet as we came to know it in the 90s and 2000s, we see it turning into a transparent, safe, and a fair playground for human interaction and digital innovation. We are honoured to be one of the companies to help shape it this way.

Financing, totalling $900K, was lead by IAF (Investment Accelerator Fund), Slaight Communications, and complimented by the debt financing from BDC (Business Development Bank of Canada). These funds are primarily aimed to fuel further growth and expansion of their development team in Toronto, and to support the growth of their satellite offices in New York and London.

Background

It is no secret that virtually no one is clicking on banners. Banner advertising has been around nearly as long as the Internet itself, so it comes as no surprise that we all got really good at ignoring them.

With media consumption shifting online, media companies struggle to monetize their online properties due to poorly performing ad units. Adding mobile to the mix introduces a recipe for an online publisher to run a charitable organization.

Some of the most progressive technology companies such as Facebook, Twitter, and LinkedIn have embraced native advertising as the new emerging format of monetization. However, for non-technology focused media companies it is not scalable to build their own technology to sell their native inventory. StackAdapt introduces the technology that powers their capability to sell that native ad inventory at scale.

Unlike existing banner ad infrastructures that support only static imagery, StackAdapt’s technology is built to support responsive, dynamic units that vary from site to site, making the user experience seamless for everyone on the web.

With clients spanning 4 continents, StackAdapt’s scalable technology powers the programmatic native advertising ecosystem globally.

4 min read