A Dance with Dragons: Programmatic Ad Buying vs. Native Advertising

For those of you familiar with A Song of Ice and Fire (aka Game of Thrones) you probably know that the 5th installment, A Dance with Dragons, refers to the The Dance of Dragons, a historical war fought between two Targaryen’s. Next up in this epic battle: Programmatic Ad Buying vs. Native Advertising! Can either survive while the other lives?! (Spoiler alert: the answer is yes because it’s really not a battle after all…)

Programmatic Ad Buying

To make a complicated subject very simple, programmatic ad buying uses an automated system for media buying decisions, such as exactly where to put the ad and what strategy to use. Because the media buying process is so intense now, using a software that takes its own data points to make decisions is more accurate and a lot faster. It’s like shopping on Amazon and Ebay; you can either go to a physical store to go through the manual process of buying something, or you can go to Amazon and have something arrive at your house with one click of a button. Programmatic also functions like Ebay, in that it uses an auction-based system to buy individual advertising impressions. RTB (real-time bidding) was an early solution to programmatic issues, although programmatic is more than just bidding and exchanges now; it’s about using software to get the most of every dollar you’ve spent. And it’s not all about cheap advertising…”premium programmatic” sells at CPM (cost-per-thousand) rates from $15 to $25 or higher.

But there are several things that stand in the way of programmatic ad buying, such as the use of cookies and inventory quality. If cookies go away, then all of the leveraged cookie data that helps with their buying would go away too. Furthermore, having ads show up by controversial content could be disastrous for a brand, which means that there needs to be a better way to measure the quality of inventory. The inventory quality problem is actually being addresses by ComScore, who hopes to solve the problem by providing media buyers with independent, pre-bid advertising metrics. They want buyers to know that the quality is consistent across the inventory they are purchasing. This is important in creating truly “premium” ads; ensuring that the right audience is engaged at the right place at the right time. Advertisers moving to digital should definitely invest in quality control vehicles such as this.

Here’s a picture explaining the processes of programmatic from “Programmatic for Dummies” on AdWeek:

fea-programmatic-slide5-info-01-2013

Native Advertising

Native advertising is on the rise. Brands are trying to integrate their messages into content, so that it looks like an editorial piece, as a new way to engage with consumers. However, the outlook for native advertising in comparison with traditional advertising isn’t in its favor (yet!). Why?

  1. Analytics haven’t yet matured
    1. Traditional campaigns have in depth analytics to better measure effectiveness.
  2. Audience targeting needs to become more refined
  3. Consumers don’t want to feel tricked into reading editorial stories that have an underlying brand message in them

But is native advertising going to be more relevant in the future? Some think so, with the right amount of refinery. For example, it’s still difficult to tell whether a native ad is actually working, or whether there is just so much hype around it that that’s the reason their is brand awareness attributed to it. Once the novelty of native advertising dies down, it will be easier to measure analytic information. Time will also make native advertising more accessible to smaller brands and increase quality standards. That’s when everything could change to a more integrated media strategy, seamlessly stitching together branding with engaging content. A popular native advertising example is The Onion and H&R Block. The Onion ran a hilarious article that H&R paid for creating brand awareness for their company, which is a form of native advertising called sponsored content.

hr-block-sponsored-content-onion

Summary

So we see that native advertising weaves creative content together with branding, while programmatic ad buying using traditional advertising methods in a revolutionary automated way. So who wins? Well, like most things in the marketing world, I think the answer is an integration of everything. While programmatic advertising will grow a lot faster than native advertising because if the limitations involved, both will probably be getting bigger in the near future!

Thanks for the read, and if you have another 100 hours, ASOIAF would be an excellent use of your time.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s