Why I'm Not Building a Native Ad Network

by , Dec 2, 2013, 7:08 AM
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When Polar entered the native ads market, we had a big decision to make: do we focus on building world-class technology to help scale native advertising or do we focus on building yet another ad network -- in this case focused on a new ad format? We decided that another ad network is bad news for publishers. And our customers agree with us.

Keeping the “premium” in premium publishers

The tremendous market excitement and buzz tied to native ads is that they represent an ad format that publishers can maintain a high premium for. Let’s face it: Native ads are one of the few remaining ad formats left where publishers can make a healthy margin.

Those publishers that continue to sell native ads in-house instead of relying on ad networks will continue to get top-dollar with a focus on quality. This rings true in the display world: Sponsorships that include banners, rich media, video and companion ads that are vetted perform higher than any ad unit that is populated through a network.

"Advertisers we work with at Quartz are interested in having genuine impact with highly sophisticated audiences - there's not necessarily a commodity solution to that equation,” says Jay Lauf, SVP Atlantic Media at Quartz.

Keeping the “native” in native ads

The inherit definition of a native ad is that it is native — that it adapts to the look and feel of the content around it. But it doesn’t end there; there is also context. Native advertising works best when the content also matches the content around it, that it be targeted to the same reader, written in a similar journalistic voice as the publication. There is no promise that a native ad network is going to give a publisher quality, relevant content in that native ad spot.

"Native advertising content is attractive to the consumer when it's well-written, informative and objective (versus self-serving),” says Ned Newhouse, corporate director, mbile for Condé Nast. "It’s just content that just happens to be clearly marked as sponsored. As long as the publisher is sincerely transparent, it can go a long way to helping the advertiser drive its brand and inevitable sales interests."

Conflict of interest

Can your competitor really be your customer? I see a conflict of interest when a company is providing both an ad-tech platform for publishers to run their own-sold campaigns and is actively pitching the same (premium publisher) inventory to agencies and marketers. Now the ad buyer has two channels to reach the same inventory, but can you guess which one is cheaper? We’ve already seen this in both mobile and video, where ad networks are undercutting the publisher’s own inventory.

Content recommendation networks are different

The network model is working for content recommendation engines like Outbrain and Taboola because they are paying the publisher for traffic back to the marketer’s site. This model differs from a premium native ads business, in which a publisher wants the reader to stay on their site longer, to engage with the content, to share it, which will in turn bring new readers back to the site.

Let’s NOT repeat the banner experience

Some may say ad networks will help scale sponsored content the way it did for banners all those years ago. But look at the decline of the commodity of the banner: with ad fatigue and declining click-through, the banner isn’t driving the revenue in for the publisher it once did. And when was the last time you shared a banner ad with your friend?

2 comments on "Why I'm Not Building a Native Ad Network".

  1. Mike Einstein from the Brothers Einstein
    commented on: December 2, 2013 at 9:13 a.m.
    The problem with native advertising (at least one of the problems) is that it lies in waiting to be discovered in context to content that someone actually wants. Sounds to me like banner ads all over again -- just more expensive. The idea that this wolf in sheep's clothing can possibly fool anybody is insulting at best and virtually idiotic at worst, and is nothing more than the latest in a long and growing line of concessions to failure.
  2. Andrew Boer from MovableMedia
    commented on: December 2, 2013 at 7:10 p.m.
    Mike, I agree and disagree. I personaly don't find it impossible to imagine that a single sponsor can create content that is both compelling and functions primarily in service to the reader or viewer. The existence of forty beloved years (by some) of soap operas certainly speaks to its feasibility. The entire Italian Renaissance was essentially native advertising for the Pope and the Medicis. It can be done, and it has been done. But the part where I completely agree with you is that there is some purported benefit to being discovered in context to content that people find valuable. If content is entertaining and useful it will be found, but the halo of premium publishing brands will add little value to its distribution, especially if it is now served through an ad network. Bound to fail, I think.

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