One of the reasons that digital publishers like to talk about native is obvious: it resembles the age-old practice of high-priced "advertorials" and the natural customization of the placement dictates that marketers must deal directly with the site's sales team.
At the same time, those reasons have left agencies feeling frozen out by native ads, since, by definition, these one-off deals can't be scaled across other publishers' properties. But Nativo, a three-year-old native ad software provider to the sell-side, recently has been working with VivaKi to make this form of marketing more palatable to the buy-side by focusing on building a layer of automation into the deals.
"When we started, we weren't thinking of 'native ads' per se," said Justin Choi, Nativo's CEO. "We were interested in building technology to make it easy to automate the distribution of brand-generated content -- which you could call a form of 'programmatic native.' VivaKi understood this was part of an emerging trend within online advertising and decided to work with us."
Nativo starts out with a publisher deal – it has about 1,500 such deals in place right now, but Choi is clear that he is not pursuing an ad network model, where the same native placement would be placed across multiple sites. Instead, through the use of some source code that conforms to a publisher's content management system, the advertiser and its agency can start plugging in once a buy has been made. Nativo charges based on the use of its software to create a template for native ads and then takes a cut from the impressions that are generated from the spot.
"The assumption we confront is that native can't be automated or sold programmatically," Choi said. "Our proposition is that scale is best solved through technology. Secondly, we want to prove that native advertising can be sold on an impression basis, and therefore attract more agency dollars."
Originally dubbed PostRelease, the Long Beach, CA., company changed its name to reflect the growing interest – some might say hype – around native advertising. That wave of interest helped the company raise $3.5 million in a first round funding from Greycroft, giving it a total of $5.3 million in venture capital since opening its doors. The company has been using the proceeds to build out its ad serving business.
To be sure, the idea that native ads can and should reflect some of the wider industry changes around real-time have been heavily influenced by the recent activity of Facebook, Twitter and other social channels that have challenged the typical model traditional publishers have always relied on.
Secondly, the rise of mobile usage – and the arduousness of transferring display formats to smartphones – have forced publishers to think about how an ad can scale even within their own singular titles. Since publishers' content systems have adapted pretty well to the prerequisites of the smaller mobile screen, native ads simply make more sense for publishers. And what makes sense for publishers, will tend to make sense for advertisers.
"Traditionally, publishers would hard code sponsorships," said Alyson Hyder, VP, VivaKi Ventures, in an email conversation with AdExchanger. "So while it may have looked like an advertorial, it took a considerable amount of time and resources from both the publisher and advertiser. Nativo not only simplifies this process, but allows you to do it at scale and across devices."
The hype around native advertising is in part a result of the rather fluid definitions for this form of marketing. Is native advertising a case where ads masquerade as content, in an attempt to fool the audience into looking at a paid message as opposed to one decided by editors and writers driven solely by interests of their audience? Proponents of native ads are always quick to say that if that's being done – it's often hard for anyone to produce concrete examples of such edit/ad line blurring – that just means it's being done badly.
Furthermore, when talk turns to employing greater automation in the native ad serving process, it's often thought that just the opposite will happen – ads that have only a superficial relationship to a few out-of-context keywords will make these placements stick out like sore thumbs and result in nothing but greater audience alienation from the site.
Nevertheless, those who believe that the use of machine-based operations would not do well in the case of "programmatic native," might want to recall the recent contretemps that the Atlantic Media Company faced after a native ad touting Scientology led to a wave of negative attention on media news sites and led to the spot's swift takedown, as the WSJ reported, and a profuse apology issued by the publisher.
Whichever way things are apt to lean in terms of native's twin perception problems, there is a growing consensus about the need for native ad guidelines to be established by publishers, a proposal that was raised last week by AOL CEO Tim Armstrong, Adweek reported.
Choi isn't so sure that guidelines are necessary. He prefers better technology, which he argues will help both the edit side and the publishing side build a better experience for all.
"For the most part, most ad technology solutions have been solely about revenue, whereas native advertising is about making the content experience more meaningful both the content creation and the publishing sides," Choi said. "The reason there's been so much noise in the marketplace about native ads is that the industry at large is just starting to wrestle with those questions. Technology takes a lot of the pressure off both sides to focus in on what sort of message will fit in unobtrusively and add something to what a publisher's side already does when it produces something its users want to visit."