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Here's How Native Ads Will Scale

With FBX Paving The Way, RTB Is Ready For Native

By Published on . 3

Though it may reign as the advertising industry's favorite buzzword, so-called "native" advertising has yet to prove its ability to scale.

But that may not be the case for long.

Native ads and the high-volume world of real-time bidding are on course to come together, with the most difficult hurdle, the technological one, all but cleared thanks to the introduction of Facebook's FBX exchange ads.

Here's why: In order to serve Facebook's FBX ads -- and reap the corresponding revenue -- demand side platforms such as The Trade Desk, Turn and MediaMath were forced to build text functionality into their display platforms. That retrofitting, bringing text into the equation for the first time, paved the way for other text-based ads, such as sponsored content, to move through the platforms as well.

Bill Demas
Bill Demas

"Facebook runs an auction to serve text and another shape of a banner," said Jeff Green, CEO of demand side platform, The Trade Desk. "There's no reason why we can't just do text."

"We really can support any creative type, as long as it's bits and bytes," said Turn CEO Bill Demas.

Publishers lose control
For native ads to become commonplace on real-time bidding, though, a number of obstacles must be overcome. While native ads may be ready to "go RTB," publishers also need to be willing to give up some control over what content ends up on their sites -- a necessary component of participating in a real time, automated buying world. Given the controversies that have erupted over direct-sold native ads, RTB-sold native ads might make even the most flexible publishers a bit queasy.

And there would also need to be some form of standardization, said Mr. Green. Getting access to FBX inventory was worth building out new functionality, simply because there was so much of it. A similar effort would likely be worthwhile if Twitter introduces RTB Twitter ads via MoPub. But building for numerous varieties of sponsored posts may not be worth a similar effort in each case.

Several companies, such as Nativo and Sharethrough, are working to standardize native ads so they can be sold at scale, so an integration between them and the demand side platforms may not be far fetched.

Dan Greenberg
Dan Greenberg

"Absolutely, we're going to make our inventory available through the other, more standard programmatic platforms," said Sharethrough CEO Dan Greenberg. "For us to solidify that leadership position, it's not about creating a walled garden. It's about putting that inventory in a place where people want to buy it."

Mr. Green said The Trade Desk has had discussions with a number of such companies about potential partnerships.

Lots of hype
Mr. Demas however cautioned that, in this case, the hype may be in front of the reality. "Native is getting a lot of buzz in the press," he said. "How much I'm hearing about it from advertisers and publishers who really want to execute this is certainly less than the hype."

Still, with the functionality there and the need for scale and precision evident, the introduction of native to RTB is likely not far away.

"It's not in the next month, but it's within the next year," said Mr. Greenberg.

"I think you'll see exciting things happen in six months or less," offered Mr. Green.

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