Adotas recently caught up with Robert Wildner, Glispa Group’s VP of Media Operations and Head of Ampiri, to talk about the challenges facing programmatic and native advertising on mobile.
Q: Programmatic and native are both growing steadily. Why has getting them together on mobile proven so challenging?
A: Up until recently, the reason it was difficult to sell native ads programmatically was due to low adoption rates. On the advertiser side, there was concern about control on how the ad would look, while publishers expressed doubts on whether they would be able to implement customizable templates that look good in their apps. In the early days of native, each publisher designed their own format to fit the look and feel of their particular channel. However, sensing the need for a unified approach, the Interactive Advertising Bureau (IAB) set up the OpenRTB 2.3 open protocol. This made it a priority to establish standards for native programmatic, which are now relatively well-adopted within the industry.
The benefits of native ads are already well-known, with the unobtrusive format offering mobile click-through rates almost five times higher than banner ads. And now, setting up native ads on mobile is much easier than most people think: in order to fit into the IAB’s OpenRTB 2.3 format, native ads simply need to incorporate elements of their traditional banner ads, which are then modularly added to the native format which the publisher app uses. The process can be completed within a matter of minutes. This year, more than $10bn of native inventory is expected to be bought and sold using OpenRTB, and with more and more publishers signing up to display native ads which adhere to these standards in their apps, it’s never been more simple for advertisers to place native ads at scale.
Q: What are the implications of automated mobile native when it comes to scale?
A: The first implication when it comes to scaling native ads on mobile is that user engagement will increase. This is because along with scale and programmatic methods comes better targeting. Users who are shown relevant ads will click on these more often, thus improving engagement.
Once this is the case, programmatic demand will also increase, as advertisers take note of the high performance and transparency which programmatic native advertising delivers. Advertisers have greater insights into how and where they are buying ad slots by getting access to direct inventory. By letting them select which apps their ad is shown in, they are able to control where their brand is shown, guaranteeing them the right audience. On top of this, having direct insights into which apps have available inventory gives them the ability to allow the exchange to optimize automatically for them, based on preset KPIs, or to manually set which traffic sources they consider best.
Publishers benefit from programmatic native in that they will see higher eCPMs for their inventory. Their bid depth increases as the automated process allows more advertisers to bid for the same inventory, allowing for higher bids.
Q: Is the mobile ecosystem more adept at targeting ads and if so, why?
A: Mobile is able to better target ads due to the fact that the devices are so personal to the user. Compare this to desktop devices, which are often shared by people with different interests. In collecting first-party data on their behavior, it becomes easier to show them ads which are relevant to them, boosting discoverability for the user, acquiring high-quality users for advertisers and higher payouts for publishers. The programmatic exchanges which facilitate the placement of these ads usually have access to a data management platform (DMP). These DMPs store deep-dive data points, setting up billions of anonymized user profiles which center on devices, and use these to set up advanced personas which can be better used to target the right users.
When an advertiser sets up ads for their app on a native programmatic exchange, they also set their desired targeting parameters. Through accessing the DMP, the native exchange is able to then make sure these ads are only placed in front of users who fit these requirements. Advertisers want to know that their shopping app is being shown to a female audience in countries in which they actually operate, for example, and they are willing to pay for this, getting publishers higher payouts as they are able to deliver more relevant users to advertisers. This shift to a much more audience-centric approach improves the mobile experience for all parties involved, including the users, who get shown ads that really interest them.
Q: When will trading mobile native ads programmatically finally become the norm, rather than the exception?
A: I think this is already happening. Native ads are becoming ever more popular, as their higher performance becomes more evident. What was missing was the ability to go big in terms of scale, but we’re overcoming that hurdle now. The proliferation of mobile native exchanges shows that the supply is there: our own native exchange, Avocarrot, saw a significant increase in native ad placements over the last year, with eight-fold growth from 1 billion placements at the beginning of 2016 to over 8 billion at the beginning of this year. So the supply is there and we’re showing advertisers that converting to native formats is quicker and easier than they think, giving them access to higher-quality users on a more significant scale.