"Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Justin Choi, CEO at Nativo.
The Interactive Advertising Bureau’s recent update to the OpenRTB guidelines (PDF), which incorporate dynamic in-feed ad units, is generating lots of noise around programmatic, real-time bidding (RTB) and native. In-feed ad vendors can’t wait to pump real-time advertiser campaigns from demand-side platforms (DSPs) and other open buying platforms directly into publishers’ editorial feeds.
Before publishers open the RTB floodgates and expose their most valuable and fragile page real estate to DSPs and open exchanges, they should take note of some of the potential pitfalls.
Programmatic And RTB: Not The Same
Programmatic and RTB are nothing new to digital buyers and sellers, but ad vendors interchange them when discussing native in-feed, causing confusion in the market. Programmatic, in the form of a private marketplace or private exchange, offers workflow automation that enhances a publisher’s direct-sold proposition to marketers. RTB is a part of programmatic and adds incremental value when applied carefully to publisher offerings. However, RTB, left unsupervised, can undermine and damage publisher interests. Exposing premium in-feed units to real-time markets poses a huge liability that publishers cannot afford to ignore.
User Expectation And Trust In The Feed
Ad tech vendors, in their effort to RTB-enable publisher feeds, point to the promise of revenue gains from DSPs presently accessing the Facebook Exchange (FBX). Their rationale centers on the similar construction of in-feed ad units and news feed ads, in terms of headline or thumbnail, but that ignores the danger of placing click-out experiences, which threaten consumer trust, smack in the middle of the editorial stream.
Publishers who prioritize consumer experience and don’t want to put their long-term business in danger would not knowingly kick users off their sites after they clicked on content, but that’s the user experience real-time demand platforms deliver and it’s the only experience OpenRTB 2.3 supports. For decades, publishers have built significant consumer trust in the editorial feed through authentic content experiences, resulting in high user attention and engagement, and distinct expectations of how in-feed content should behave. With native, user trust is preserved when brand content, promoted in-feed, keeps users on-site after the click.
Ad Quality And Campaign Goal (Mis)alignment
Equally important to preserving trust in the publisher feed is maintaining quality control over the content promoted there. Last year, Outbrain examined how the quality of in-feed ads directly impact consumer trust. The results showed only 32% of respondents trust in-feed ads that read like ad copy, which is on par with banners at 24% to 34%, and trust in the editorial feed plummeted by nearly 30%. When authentic, informative brand content was promoted in the same ad placement, trust spiked to 60%, and surrounding editorial skyrocketed to 83%.
Outbrain’s study demonstrates the risk of trust erosion when users encounter ad copy in the feed and reveals a fundamental mismatch between DSP volume and user expectations of in-feed content quality. DSPs primarily service direct-response advertisers and optimize for cost efficiency, traffic driving and purchase conversion key performance indicators (KPIs), whereas the feed is anchored to discovery and on-site engagement, which align to content marketer upper funnel branding and consideration KPIs.
Clear misalignment in ad quality, authenticity and KPI goals unravel the argument that publishers should expose their feeds to DSPs and open exchanges. Let’s also not forget that real-time demand sources will optimize out of the inventory due to incompatible success metrics and low conversion.
Accelerating Ad Avoidance And Blindness
Users will quickly learn to avoid all in-feed ads if publishers push ad copy and click-out experiences in the feed. This outcome would be disastrous to native ad performance, price premiums, packaging, delivery and yield.
Facebook is a prime example of what can happen when open real-time access is granted to the content feed. Less than one year after launching, FBX became best known for retargeting and dirt-cheap direct-response ads ($0.45 average CPM), in addition to the news feed becoming littered with poor-quality branded content posts. By the time Facebook took steps to clean things up, the damage was done. “People are developing blindness to branded content on [Facebook],” a recent study by Havas Media and Crowd Emotion concluded.
The idea of publishers inviting the same kind of open access to their most valued page real estate should be a non-starter.
The Path Forward
While the concept of applying RTB can be highly intoxicating, publishers must beware of the significant vulnerabilities this approach can expose. To avoid irreparable damage, publishers must dig deep with potential partners and quickly weed out those whose tactics and long-term objectives do not align with their strategic vision. A chance at short-term revenue should not compromise publishers’ long-term audience investment or the foundation of a healthy ecosystem.