• by Eric Berry , February 18, 2015

The online advertising industry has shown an unrelenting drive toward programmatic for nearly every media channel. But native, a relative newcomer, is largely understood to be different.

Large sites’ usual version of native is to have advertisers collaborate with the site’s editorial team to create branded, engaging content. Yet to be a meaningful part of the overall advertising budget, this form of native  -- what we call “long-form onsite” -- will take a back seat to more programmatic efforts that do not require direct relationships between the advertiser and the publisher. The question then is what native programmatic will look like when the industry at large eventually adopts it.

The definition of programmatic is vague and in dispute, but its effect is not. Ideally, it allows sophisticated targeting, optimization, and attribution -- without worrying about the nuances of each separate publisher.  Programmatic must allow massive scale without requiring a separate contract for each source of inventory.

Meanwhile, long-form, onsite native creates a tightly integrated experience for highly targeted campaigns aiming to reach a handful of publishers. A single piece of content produced by the advertiser will match the brand voice of these publishers.  

However -- much as with banner ads -- advertisers will never be able to forge direct relationships with thousands of publishers and produce unique content for each of them. So either the unique content limits the scale to a small number of partners, or the content is more general and does not match the editorial voice across the broader distribution of publishers. The former limits the ability of native to go programmatic and achieve meaningful scale, and the latter requires a large set of publishers willing to host arbitrary third-party content under their masthead. Both are suboptimal, with the latter undermining publishers’ integrity.

So, while it will have its place as a niche format, long-form, onsite native ultimately cannot be the standard for programmatic at mass scale. One alternative is adaptive outbound advertising, which requires a relatively fixed set of assets and a link to content ultimately hosted by the advertiser, under the advertiser’s masthead.  

Unlike long-form onsite native, publishers do not host the content on their site..  The key to the success of this medium is an effective translation layer that works to mediate between buyers in DSPs and the unique look and feel of each publisher.

There are several tradeoffs with adaptive out-bound advertising.  Because the set of assets to buy is much simpler (you do not necessarily need a long-form article -- it can be what you already use on Facebook, for example), the body of eligible demand is significantly larger.  However, it could be argued that this will mean publishers must sacrifice their direct relationships with advertisers -- and ultimately money.

This argument assumes a global reversion to the halcyon days when such relationships were possible. The fact is that, but for periodic one-offs, the world is moving toward programmatic. Unless publishers are large enough to consistently warrant the overhead of creating custom assets, they will not reliably find native advertising partners. But by tapping into the pool of programmatic native, publishers can significantly increase their monetization options.

The other tradeoff – quality of assets – will hopefully be determined by performance. Advertisers should ultimately pay for performance. More engaging content will drive higher prices. If advertisers can measure the effects of content, as they would through a standardized medium, they will be willing to optimize their content and pay the appropriate premium. With long-form, onsite native, questions abound regarding the ultimate value of scroll-depth and dwell time, and their impact on sales. Giving publishers the ability to white- and blacklist brands and categories will let them choose where on the monetization spectrum brands fall (quality vs. quantity).

It’s very possible that native will be fully programmatic in the near future. Several large DSPs have announced integrations with RTB-enabled native platforms ranging from Facebook to general translation layers. And with any luck, in a few good years, the days of banner ads might be behind us.