But really, WTF is programmatic and native advertising? Before this weeks’ reading I hadn’t heard of either of those things. I guess that makes me a bad marketer, but hey, that’s why I’m in college.
HubSpot defines programmatic advertising as the process of using automated systems (artificial intelligence (AI) technologies) and data to make media buying decisions without humans. It’s about efficiency, scale, and targeting.
HubSpot defines native advertising as sponsored content, which is relevant to the user experience, not interruptive and looks and feels similar to its editorial environment.
So basically programmatic advertising is the use of a third party AI software for real-time bidding on ad space across mobile, display, video and social channels, while native advertising is the process of buying ad space and publishing an ad that is so similar to the original content that it doesn’t yell “sales pitch” as the viewer.
Take this advertisement for example.
A popular technology website, Wired.com, launched an in-depth article about how technology is changing advertising. The ad, sponsored by Netflix, discussed everything from binge-watching and increased risk taking within the industry. Netflix’s logo, in the top right corner of the header, and the “sponsored content” wording discreetly lets you know that the article is sponsored by Netflix. The advertising looks like it belongs with the content and is not interruptive.
So now that we kind of know what each of these concepts are, let’s talk about who uses them and why you should use them.
1.) Programmatic Advertising
When first introduced, this software was used exclusively by large advertisers, but as technology advanced it became more accessible for small and medium-sized businesses. It’s ability to use data for individual targeting is what made it stand out against traditional media buying.
Some major benefits of programmatic advertising are;
- It allows you to target your KPI’s more efficiently: Allows you to work to improve performance towards your campaign key performance indicators (KPI’s).
- More cost effective: Advertiser have the ability to adjust cost per 1,000 impressions (CPMs) in real time dependent on how heavily that impression is valued.
- You gain more customer insights: It is always gathering ‘smart’ data on your audience.
- Makes media buying easier: You can spend more time focusing on the overall strategy for our campaign instead of on buying media.
- Scalability: Allows you to reach larger audiences across multiple websites in a timely and efficient manner.
Even though it sounds great, programmatic advertising doesn’t work for everyone. This type of advertising works great in the business to consumer (B2C) marketing, but doesn’t have the same effectiveness in the business to business (B2B) marketing. This is because programmatic advertisement relies on real-time data and is most efficient in fast-paced environments. Since B2B marketing is associated with longer sales cycle, it is difficult for the software to accurately target buyers.
2.) Native Advertising
Native advertising can come in the form of sponsored blog posts, sponsored articles and sponsored Facebook updates. It is one of those things that can be used by everyone and its main goal is to increase brand awareness and drive social engagement.
Some major benefits of native advertising are;
- It captures more attention: Native advertising campaigns generally have higher viewer rates, greater conversion and more engagement then display advertisements.
- Helps build relevance: Gives access to greater sharing opportunities and building relationships with you target audience.
- Less intrusive: Native ads flow better with the media’s context and does not interrupt the users experience.
Some people may think that native advertising is unethical because of misleading or dishonest headlines that the content may have. You may run the risk of audience backlash if consumers feel like they have been tricked into clicking on your ad. Even though native ads have to be clearly labeled as sponsored, your audience could still react negatively.
- A few examples of native advertising are;
- Promoted Tweets on Twitter
- Promoted Videos on YouTube
- Promoted Pins on Pinterest
- Paid ads that appear in search engine results
- Sponsored article on Huffingtonpost.com
Are native advertising and programmatic advertising the future of marketing?
Who knows, but both of these concept have seen huge growth over the past few years and are expected to continue to grow in popularity.
“The IAB estimates that by 2018 programmatic spend will have grown from 28% in 2013 to over 80% of marketing spend. It’s time to jump onboard and think about where and how you’ll be spending your digital budget.”
Interest in programmatic advertising has increased from 2013-2015, while traditional display advertising has started to see a decline.
Business Insider forecasts that by 2021, native ad revenue will make up 74% of total US display ad revenue.
The idea of native advertising took off in 2015, when large publishers tested the concept and saw success. Other than being used by large publishers, native advertising was still a new concept.
“A lot of publishers didn’t know about it, those who did know were reluctant to implement it and preferred to stick with traditional channels of monetization such as display advertising. 2016 will be the year when native advertising comes of age and ceases to be just another buzzword by gaining wider adoption among small and medium-sized publishers.” – 6 Future Trends in Native Advertising You Need to Know About
Both native and programmatic advertising are marketing trends that cannot be ignored by advertisers. Even though they both have advantages and disadvantages, they have been proven to be powerful tools for advertisers to reach their target audiences online.