With OpenRTB 2.5, Advertisers Bid Goodbye to the Industry’s Bad Rap


 

Advertising has always gotten a bit of a bad rap. And although it may pain marketers to admit it, advertising’s somewhat negative reputation makes a lot of sense. Traditional, non-skippable commercials could essentially be defined as irrelevant content viewers are forced to impatiently suffer through in order to obtain access to the content they actually want to watch.

But what if, instead of annoying viewers and visitors by intruding on premium programming or websites, marketers were able to recast advertising into a helpful and supportive role? Enter native advertising: a form of paid media in which the ad experience follows the natural form and function of the user experience in which it is placed. It’s a seamless advertising user experience that blends with content in a way that adds to it, rather than distracts from it. Native may become the key to unlocking a better advertising experience for all—including marketers, viewers and publishers alike.

Native ads also may be the answer to a rapidly growing challenge currently stumping the ad industry: widespread ad blocking. According to a recent survey by eMarketer, 26.3% of Internet users use at least one ad blocker when surfing the web. Ad blocking has been conservatively estimated to likely cost publishers $35 billion by 2020. And with over $32 billion predicted to be spent on display advertising in 2016 alone, these staggeringly large and sobering figures are forcing marketers to rethink how they go about the business of advertising.

In November 2016, the IAB rolled out OpenRTB 2.5—a continuation of the collection of guidelines which set the standard for how native ads could be bought and sold through real-time bidding. With this version, the IAB added features to better address the growing popularity of native.

According to Business Insider Intelligence’s May 2016 Native Ad Report, native advertising spend is already slated to grow to nearly $21 billion in 2018, due in large part to data made available that proves its unprecedented effectiveness. In a recent study conducted by ShareThrough and IPG, for example, users looked at native ads 52% more often than display ads. When compared to display ads, native ads resulted in 18% more purchase intent and 9% more lift in brand affinity. 32% of survey respondents said native ads were ads they “would share with a friend of family member.”

What has made native advertising such an instant hit?

At its core, native advertising is fundamentally simpler to execute than non-native ads. Standardized from the get-go, native represents a quadruple win for consumers, publishers, vendors and advertisers alike. With native, consumers benefit from an improved user experience—and zero abrasive interruptions. Brand advertisers also experience a slew of benefits, including improved viewability, efficiency and brand lift. And native ads allow publishers to streamline their sites so that they are able to deliver better experiences for both consumers and brand advertisers.

The fact that native can now be traded programmatically is the cherry on top for an already-stellar ad format. Until recently, native display ads were primarily sold through direct channels to ensure that creative and formats matched where native ads were being served. Now, major ad networks and exchanges—including Google, Yahoo, Facebook, Twitter, Sharethrough, TripleLift and a slew of ad tech partners—support the buying and selling of native ads through programmatic channels.

Native’s shift into the realm of programmatic brings three primary advantages to marketers:

  1. Highly adaptable format. Programmatic native is a technology solution that adapts effortlessly to the user experience. With programmatic native, advertisers are able to serve various images and copy within a single campaign. Within the programmatic process, the correct image and copy are automatically determined by the exchange, depending on where the impression is eventually served.
  2. Efficiency. Programmatic technology helps advertisers scale native campaigns across many publishers without creating bespoke creatives.
  3. Targeting capabilities. Advertisers can use first-party or third-party consumer data to efficiently reach their specific audience.

The continued rollout of programmatic native technology will contribute to a steady increase in native-style display spending in the coming years. According to Business Insider Intelligence, native display ad revenue in the U.S. is likely to rise at a five-year compound annual growth rate (CAGR) of 17% between 2016-2021 to hit $36.3 billion. And by 2021, native is slated to account for 74% of total U.S. display ad revenue, up from 51% in 2016. Although not all marketers are ready to dive into programmatic native yet, it is increasingly clear that the future of advertising is native. And according to the latest growth projections, it’s a future that is expanding rapidly.

 

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