Seeing Through Native and Programatic Advertising

The world of advertising has been ignited in a sense, and is burning in new directions that are changing the game. Two of these game changers are native advertising, and programmatic advertising. Both methods of advertising have grown significantly in popularity and use over the past couple of years. In fact, native advertising spending is expected to reach $21 billion by 2018, and programmatic advertising is expected to reach $27.47 billion in sales by the end of 2017. So before we get carried away with these seemingly complex and wealthy ways of advertising, let us break down both strategies, and see through what these ads aim to achieve.

Native Advertising

To put it most simply, native advertising is a brand’s way of providing content, that is intended not to feel branded. Hence, a native ad is meant to feel natural and organic. Native advertising is kind of like a chameleon; while it is indeed there, it also camouflages itself and must be truly analyzed in order to be noticed. The idea is that a customer could read an editorial piece that is completely paid for by Brand X, but by the end of the article, they will likely not even know that Brand X had anything to do with it.

"The relevancy of native advertising carries across diverse channels, largely owing to the fact that there is nothing flashy about the ads – there are no large fonts, special animations, or innate flourishes." 

One native advertising powerhouse is the New York Times. In fact, in 2014 alone they sold $18 million worth of native advertisements. One example of this is an editorial piece entitled Grit and Grace, which discusses the intensity and difficulty of point ballet. The article also has a few videos embedded with New York City Ballet dancers discussing their craft, and how they cope with stress and the physical demands they face. Okay, so this is all super interesting, but where does the native advertising come in? If you look closely at the very top of the article there is a small banner that indicates that this post is a “paid post,” and if you look at the very bottom of the article, there is a banner that reads “the news and editorial staffs of The New York Times had no role in this post's preparation.” What? Well of course not, because this is a native ad. This ad was actually paid for by Cole Haan, a company well known for their shoes and accessories. My marketing intuition tells me that Cole Haan hopes that this piece will get people thinking about ballet, and then ballet flats, which might ignite their search for ballet flats, which might lead them to the Cole Haan website.

So native advertising is interesting in the way that it plays the exact opposite tune of traditional advertising. Which is perhaps why it has seen such growth and success recently. Is it effective though? I would argue that yes, it is effective, but at the same time it is not a magic marketing potion. It is effective in the sense that it is a way of providing meaningful content to consumers that allows them to engage. Consumers do not like ads, but consumers do like content. It is not the most effective method, however, in the sense that only a very small fraction of your audience is likely to make their way to your website. Additionally, native advertising usually costs a fair amount.

Another example of native advertising can be seen through Gimlet Creative, which partners with brands to create sponsored podcasts. For instance, DTR is a series of podcasts that are available on Gimlet Creative that are sponsored by Tinder. After listening to the “Hey” podcast, I was able to see how the podcast was beneficial for both Gimlet and Tinder. While it is arguable that podcasts such as this are damaging to the credibility of Gimlet, in my opinion, Gimlet avoids this because Gimlet Creative can stand as its own brand away from Gimlet. Additionally, while these podcasts are native advertising and consequently do not obviously promote the brand, Tinder also reaps the benefits. Discussing various topics such as the phenomenon of using “hey” to start conversations on dating websites, is interesting for listeners, and gets them thinking about the world of online dating. It might even make them curious enough to download Tinder and see if the “hey” phenomenon happens to them. Overall, I see native advertising such as this, as a win-win situation.

Programmatic Advertising

Okay, so what is programmatic advertising. It is basically when marketers buy digital ad space through a computer software system. This type of ad purchasing is popular because it allows marketers to use data and intensely target the ads they run. Purchasers essentially bid on various ad types using programmatic systems, which again are appealing because the options are all centered around loads of data. “Programmatic is extremely efficient and unparalleled in its ability to pair rich audience data with ad inventory and targeting.”

Currently, 96% of marketers are using display ads, and more than half of all display ads are bought using programmatic advertising. Numbers are only expected to grow. "90 percent of the ad market could be steered programmatically within one decade." That being said, it is important to note that programmatic advertising is a relatively new tool, and consequently, a company is likely to need an expert, often from an agency, to help implement successful programmatic ads.

"We hear a lot about brands moving toward 100% in-house programmatic these days, and the low percentage of marketers who truly understand programmatic buying and leverage it to their benefit speaks to how far away we are from this becoming a reality." 

Why is this such a big deal? Well, programmatic advertising is basically a marketing super power. It is simply more efficient than a human trying to calculate massive amounts of data, analyze this data, and figure out which audience and at what time to show a given ad. "Programmatic takes multiple data points and makes decisions [about] what screen an ad should be on, what is the most effective strategy at a given moment, and lets you do all the nonmanual decisions."

Thanks for reading!