$142.5B 2015 U.S. ad spending for 200 LNA
During the OMMA Native Ad Conference at Internet Week last month, I heard an ad tech executive proclaim, "But digital banner ads work. They keep publishers afloat."
I literally gasped out loud. Aside from the fact that "keeping publishers afloat" is hardly a ringing endorsement, it highlighted how differently technologists and advertisers look at the world. Plainly put -- from a business perspective -- if digital advertising's abysmal engagement rates are failing advertisers, they are failing everyone -- publishers, agencies, advertisers and, of course, consumers. Game over.
The tech guy's comment continued to reverberate in my mind when, as a panelist, I joined a session called "Rise of the Robot Natives: Oxymoron or Solution?" Moderator Steve Carbone, managing director at Mediacom, started the session with the question on his and everyone's mind: "Will turning native advertising into programmatic units literally destroy the quality of native content?"
Underlying Steve's question was the grim, fait accompli belief that programmatic buying is too blunt an instrument to create the intimacy that makes native advertising perform better than today's banner ads.
The majority of the audience, along with Peyman Nilforoush, CEO of inPowered (another panelist), shared Steve's skepticism about whether programmatic buying could be applied to native advertising; "When you start thinking about native ads as programmatic, you just lose engagement," Peyman said.
But other panelists argued that native and programmatic were not mutually exclusive. Sloan Gaon, CEO of PulsePoint, astutely observed, "What can go programmatic, will go programmatic," a sentiment echoed by John Fredette, manager of global media and sponsorship marketing at IBM, when he said earlier in the day, "We would do more native if we knew how."
So the big question remains around the "how," and more specifically,"How do we not screw native up?"
Shared angst aside, there was broad consensus around firmly adhering to high standards in serving ads that are welcome, relevant, contextual and respectful of users. As an industry, we have some fumbling to get through before we evolve to that standard from today's crude, binary ad-serving platforms -- but innovation continues to move us forward.
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So while the exact path to creating programmatic native advertising may be unclear, the innovation to come will be organized around these key take-aways:
1. The business of contextual marketing, which encompasses content marketing and native advertising, is just at the very beginning of development, with many new opportunities for creativity and innovation.
2. Managing the value exchange of native advertising is central to maintaining the superior performance of native ads vs. banner ads.
3. Programmatic is not the enemy, but a tool that has a long innovation curve ahead of it.
4. Language is still evolving to capture these new marketing capabilities. While industry organizations like the IAB are working on standardizing terms, it is a fluid landscape given the iteration cycles of software companies. Until there are norms, remember that definitions matter.
5. Creating intimate marketing at scale is an emerging capability. From a practical perspective, this means that native advertising will struggle short-term because it is caught between the limited programmatic technology of today and the ad-serving innovation of tomorrow.
It is heartening to see that the native debate is forcing the industry to ask hard questions about the digital ad ecosystem. It is even more encouraging to see the innovation that is emerging as a result of this honest look at the effectiveness of digital ads. No doubt we will see wondrous new types of engagement or experiential ad units deeply informed by rich (not big) data and consumer choice thus saving digital advertising's soul from marketing oblivion.
But what's most exciting is to realize that in the not-so-distant programmatic future, we will be able to create and deliver intimate, contextual relevant marketing -- on a wide scale.
Unless, of course, we screw it up.