Native, Programmatic Lead Ad Industry Growth, But Not Without Challenges



New money continues to roll into the advertising industry. While companies offering programmatic and native advertising will likely capitalize on the move, a study examining both media uncovers challenges hidden in objectives highlighted by brands participating in the study.

Purch, which rebranded from TechMedia Network in April, said the common thread in its study analyzing opportunities and challenges points to awareness through branding and performance through conversions. 

Some 71% of advertisers participating in the study -- which focused on native and sponsored content -- view branding as a main objective, with 65% citing sales and conversions as a top priority. About 75% said programmatic campaigns are typically assessed through performance metrics, yet 51% of advertisers using programmatic strategies include brand lift among their top evaluation metrics.

Purch commissioned the study conducted by Advertiser Perceptions in Q1 2014, with help from U.S. brand marketers and their agency partners spending $1 million or more on digital advertising. The average digital spend for the advertising participating in the survey was more than $16 million in the past year. The survey focused on their current use and future plans for native/sponsored content and programmatic digital advertising campaigns.

Despite predictions that marketers will spend triple the amount in native advertising by 2015, obstacles remain. Some 46% said insufficient reporting and return on investment (ROI) metrics are the biggest challenge to success; followed by 38% who believe a misalignment exists between campaign and marketing objectives; 26% who point to required time and resource commitment; and 24% who believe native programs are not sufficiently turnkey.

Although native advertising programs are rarely available through programmatic platforms, 42% of advertisers participating in the survey expect to begin purchasing the media that way within the next six months, and 79% expect to purchase them that way within the next year.

About 73% of advertisers agree that programmatic media-buying and direct sales can coexist, with each serving a distinct purpose.

The obstacles to increased use of premium programmatic, preferred or private auction deals negotiated with a publisher include a lack of premium inventory at 54% and inadequate targeting to preferred editorial brands and audiences at 37%.

Some 65% of brand marketers surveyed have used agency trading desks and 61% have used demand-side platforms to purchase programmatic media, but 36% prefer to purchase through publishers, followed by 23% trading desks and 21% who prefer to to so through DSPs. Agencies are more attracted to better performance when buying premium inventory than marketers, 46% vs. 36%, respectively. Marketers are more attracted to reaching targets without waste, 45% vs. 24%, respectively.

About 91% said audience insight and data are most important when buying through programmatic channels. When asked to pick more than one, ease of use followed with 90%; credible metrics, audience quality, transparency, inventory guarantees all came in separately at 87%, and access to first-party data at 81%.

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