Image by wecand via Flickr.

Image by wecand via Flickr.

At a recent conference hosted by newspaper marketing body, Newsworks, Doug McCabe, CEO of media research firm Enders said the digital advertising industry has become divided. One half undervalues content and context; the other puts them on a pedestal.

On one side is the automated buying of vast audiences at speed and low cost. McCabe believes programmatic has “limitations of measurement [that] help push marketing towards a transaction tool and away from the strengths and advantages of media context that CMOs seek.”

Since curators and aggregators are more efficient at driving traffic than premium content businesses, there is “an unintended disincentive” to invest in content sites.

He sees agencies expanding programmatic, believing them to be only experiencing teething problems.

The agencies’ clients, his research tells him, feel more serious questions go unanswered. Is the environment appropriate? Does it devalue the ad? Who sees it (target, non-target, humans, robots)? “It’s blind buying, which I don’t like,” said Matthew Holmes, media manager at William Hill, a betting and gaming company.

On the flip side is native advertising. It values content and context. McCabe explains: “Of course there is a contradiction here. Many brands are rapidly moving into or expanding their content commitments. Many agencies are acquiring and building content creation expertise. Every media business has developed or is considering its creative content function. The potency of media brands is evidently paramount.”

McCabe says native is on the rise because people are much more aware of and responsive to advertising on content sites – “they drive more valuable behaviour.” As evidence, he quotes research from the Association of Online Publishers (AOP).

On 4 March, the AOP held a native advertising forum. Jamie Toward, head of content at media agency MEC, and Francis Turner, MD of Adyoulike, a native advertising firm, gave their own reasons for native’s growth.

Toward points to the rejection of interruption advertising on digital platforms. Turner says traditional ads on small mobile screens don’t work as well as desktop ads, and this is accelerating the move to native.

Both agree that native prompts valuable behaviours in users. Toward says native greatly outperforms benchmarks for views, CTRs, dwell time, consideration and recommendation (negative Net Promoter Scores can be made positive).

Turner quotes an average dwell time of 2 minutes 20 seconds for native on mobile.

The AOP revealed their research:

  • Teaser ads linking to native content from the home page of premium content websites are 31 percent more likely to be clicked on than traditional display.
  • Native advertising widens the purchase funnel. At the “discovery stage” it widens by 33 percent (i.e. native is 33 percent more effective than traditional display), at the “trust stage” it widens it by 32 percent, at “word of mouth” by 29 percent and at “purchase” by 20 percent.
  • Native in the context of premium content websites creates 32 percent more trust than traditional ads but the same native execution sitting in social media streams creates only 1 percent more trust than a traditional ad.

So, native thrives on content and context while programmatic overlooks it. And the two are about to collide.

Going programmatic with native

Adyoulike’s Francis Turner predicts a ‘collision’ in 2015. It will be enabled by the ratification of the IAB’s OpenRTB 2.3 [PDF] standards that incorporate guidelines for native creative within a real-time bidding (RTB) environment.

It accounts for metadata like headline, content URL, description text and images. In short, more native will soon flow through more exchanges.

Initially, Turner says, it will affect native video content (usually repurposed TV ads) and traffic driving elements. He believes the programmatic delivery of significant sponsored content onto publisher websites will occur closer to the year’s end.

Toward acknowledged there would be a difference in quality between native created by publishers for their environments and that created for multiple sites at scale.

The latter will look and feel different – created for native advertising delivery units, not the publisher’s page.

In fact, he’d like the industry to adopt new language to distinguish between pure and scalable forms of native.

A new frontier for advertising?

Tim Cain, managing director at the AOP explains: “In purist terms native must reflect the indigenous characteristics of the media brand to provide the right context for the consumer and in turn receive the most valued attention, otherwise it is really branded content and as such a scalable solution lends itself to programmatic delivery as any ad type.”

CTRs will likely be lower for the scalable versions but, as they will be delivered at scale, there will be more clicks in total.

What of context and engagement measures? Toward says it is “hard to measure an idea or editorial quality” but “we find it easy to find countable things in delivery of content.”

There has been talk of an “Attention Index” but he can’t see the industry agreeing how to compile and weight it (“not a fight I want to have”).

Instead he foresees “hybrid deals put in place with a more traditional horse trade around the creative – and the delivery bit dealt with programmatically.”

MEC is placing its programmatic people “closer to the guys who know what a good [content] idea looks like.”

If that becomes usual the primary metrics are certain to be the “countable things in delivery of content.” Clients are after a single customer view, says Toward, requiring standard metrics for all advertising. Measures specifically designed for the strengths of native will be secondary.

What do publishers think?

Publishers won’t be at ease with programmatically bought native content on their sites; it isn’t environment specific, bought at a premium, created by their own new native departments or flatteringly measured.

Clare Chamberlain, head of brand and creative solutions at Bauer, warned of ‘immunising’ audiences against commercial messages. “Very high risk,” she said, adding, “Can we get to a point where programmatic and native are not contradictions in terms? My take is, in principal, no.”

Advertisers might also be wary of this next step for programmatic. Remember William Hill’s Matthew Holmes calling it “blind buying”? When that quote was aired MEC’s Toward said “I’m not sure what he’s on about.”

However, he had talked earlier about a “fog” making it increasingly difficult to see “who is serving the final step to the customer,” causing advertisers to worry about brand protection and agencies to fret about auditors.

Remember also McCabe saying a divide has opened between agencies that see only teething problems and advertisers that see bigger hurdles.

There’s hand holding to be done. Advertisers and publishers need to see the benefits more evidently.

They probably require appropriate metrics that value context as well as delivery. They won’t be easy to establish but, without them, agencies might see more than just teething problems by year-end.

[This post originally appeared on Neil Sharman’s website and has been adapted for Sparksheet’s audience. Read the original here.]