Why Companies Should Shift Away From Programmatic and Lean Towards Native Advertising
Written by Dylan Langei
What is Programmatic Advertising?
Sounds complex huh? Or at least very calculated, and it is. Programmatic advertising is driving digital media buying practices forward by combining rich customer data with algorithmically driven buying platforms to make digital advertising dollars more effective in reaching target audiences. Whew, that was a mouth full. Programmatic ads are purchased in an auction based method, with the buyer paying whatever price an ad is worth at that given time - using surplus amounts of data to figure out the perfect ad, the right person, and the right time. As you can see, programmatic ads improve targeting while also streamlining ad purchases and transparency when it comes to a transactions particulars. Due to its effectiveness, eMarketer estimates the programmatic ad space will quadruple to $8.7 billion by 2017. Fairly large market for those annoying sidebar ads on your Pandora station, but hey, they're effective.
What is Native Advertising?
Rather than throwing ads next to relevant content, native ads are integrated directly into the content - providing a look and feel of an editorial piece. The most common form of native advertising is publisher-produced brand content, which is similar to a traditional advertorial - essentially a paid placement attempting to replicate that of an article. Meh, still think native ads will just be a passing fad? Business Insider estimates the native advertising market to reach around $18 billion by 2017. Yup, that's about $10 billion more than programmatic advertising by 2017. Oh, so now you're no longer slumped over in your computer chair?
Where Will Advertising Lean?
Advertising is always changing, because users are constantly changing their buying behaviors and how they engage with businesses. Therefore, there is no doubt in my mind that advertising will continue to move away from programmatic, and towards native. This does not mean I think native advertising is the eternal solution, but for now, it's very promising. Native advertising is less obtrusive, and feels more authentic. However, native ads can also be deceiving and pose potential problems for businesses. Even though native ads are meant to provide and feel like an editorial piece, they are still required to clearly state or display that the viewer is experiencing an ad. Failure to do so can destroy brand equity, and bring on legal implications.
As a user of the internet and any space where ads may appear, wouldn't you rather experience a native ad than a programmatic one? That's what it's all about, user experience - businesses do not choose where advertising moves, consumers do. Personally, I prefer the native ad that is validated by a reputable podcast over a pop up ad that interrupts me from reading a blog post. But hey, I'm just one user.
Where Should Advertisers Migrate Their Ad Dollars?
NATIVE ADVERTISING. If you don't believe the numbers, just think like a consumer. What would you prefer? Nearly seamless integration of ads (native), or ugly boxes injected with advertising that is somewhat related to the content you're viewing (programmatic)? Also with the continuing surge of social media engagement, native advertising will continue to take over. It is very difficult to integrate programmatic advertising on social media outlets like Instagram (which has the most engaged user base), while a native advertising strategy doesn't seem too far fetched.
Actually, native advertising is extremely prominent on Instagram. As seen above, Instagram has titled the post as "Sponsored" so the user base knows that they are ads. But the pictures and content are very native, in that they explain a scenario or a story - as an editorial would. These ads are not obtrusive, as an Instagram user can simply scroll right by them. They are also no where near ugly or clunky boxes of misleading offers. The growth of social media is the main reason I am fully backing native advertising, and you should too. Ready your troops, because native advertising is here to stay.