Analysis & Opinion

Programmatic versus Native: Who Will Win? The Experts Weigh In.

July 16, 2013 Katie Tammaro

There appears to be a fascinating tug of war for digital media attention taking place between two seemingly opposing forces: programmatic buying and native advertising. In simple terms, machine based media buying versus advertising that blurs the line between editorial and content. eMarketer predicts that programmatic will expand its share of total U.S. digital display ad spending to more than one in four ad dollars by 2016, or roughly $7 billion. Meanwhile, native advertising spending is expected to increase from $1.63 billion to $4 billion in 2016 (eMarketer). Which begs the question: are these two trends mutually exclusive, or can they co-exist?

We asked several experts from both the programmatic and native fields to weigh in on their answers to this question. The consensus? Machines and good old fashioned ideas dreamed up by humans should be able to co-exist.

Question: Do you see programmatic buying and native advertising coexisting?  Are they truly opposing forces, or do you see them having specific roles in the media ecosystem?  

 Mike Baker, Co-Founder, President  & CEO — DataXu

They should be thought of as complementary, not oppositional, forces. Programmatic marketing represents a profound change in the business of advertising. At its core, it’s about the use of data and analytics to better understand and engage your customer. But today many advertisers are using it for little more than retargeting ads through exchanges to boost sales conversion metrics. In contrast, smart marketers are using programmatic across their media plans to make impression-level decisions on exchanges, direct buys, sponsorships and even native advertising placements. In this fashion, advertisers can control the context while also tailoring the creative message to the individual consumer — in real time.

Andrew Gorenstein, Chief Revenue Officer — Gawker Media

The exciting part [about native advertising] is the brand’s willingness to create content that readers value. It’s been around forever and doesn’t just refer to the container the ad lives in — it has much more to do with knowing what your readers want to and will engage with. To do that, we (brand and publisher) need to own the content creation process. The notion that you could potentially automate that process goes against what native is at its core. A piece of content that is native to Gawker, by definition, cannot be native to another site, even if it has a similar audience or editorial content. To run a generic piece of content across multiple sites, without considering the expertise or tone of the site its running on is neither effective nor engaging — no one wins, user or brand.

 Jay Habegger, Co-Founder & CEO — OwnerIQ

While it may seem on the surface that these two “hot” trends are somewhat conflicting, I believe that they are in fact linked. Native advertising is a reaction to, or a natural evolution, for web publishers in a programmatic world. As programmatic has become increasingly effective at providing advertisers solutions for standardized ad units, it is becoming much harder for a web publisher to add value for an advertiser and justify premium rates for these same standardized units. I also think programmatic will continue to be the best solution for any ad unit that can be standardized and delivered at scale. But, as a result of this trend, I would expect web publishers to create more integrated and less standardized promotions so they can charge more for these units and create scarcity — the fundamental things that make the economics work for a web publisher.

Chris Schreiber, VP of Marketing and Communications — Sharethrough

On the major social media platforms such as Facebook and Twitter, which are closed native advertising platforms, programmatic buying has already begun. In regards to the open web, we see a future where programmatic buying could play a role in native advertising. A couple key factors that will contribute to the growth of this will be an increased amount of timely branded content and improved content quality ranking algorithms from native media and technology providers. We expect the native ad market to evolve in a similar way to Google’s AdWords, where the inventory will be priced through a combination of biddable placements and content quality algorithms that ensures the most shareable/engaging branded content is rewarded. That said, native ads are a premium experience where the relevance and quality of the brand content are key to maintaining the value of the media placement, so it will need to be a gradual process of incorporating automated platforms with fairly stringent controls in the hands of publishers.