According to a study reported in Forbes, online consumers are 25% more likely to look at a native ad than a standard display ad. And viewing a native ad made consumers 18% more likely to purchase than viewing a banner.
To an industry scratching its collective head over what to do about the decline in effectiveness of banner advertising, metrics like these are welcome news – and more trading is being automated all the time. According to a study by The Trade Desk, 70% of UK display ads are now sold programmatically. And programmatic can boost conversion rates by up to 26%.
But until last year, there was a catch. There was no industry-standard way to trade native ads programmatically.
The release of OpenRTB 2.3
In April 2015, the Interactive Advertising Bureau (IAB) released its OpenRTB 2.3 specification. This updated the industry-standard for real-time trading to allow native adverts to be bought and sold programmatically, in a way that gives publishers fine-grained control over how the ad will appear.
The new standard allows supply-side platforms (SSPs) to assemble a native ad in real time, and be confident that the template it builds will fit the design and layout of the site on which it will appear. This is much more complicated for native ads than for a traditional display ad; instead of just a link to a banner, the publisher needs information on the headline, image, brand elements, and any relevant metadata.
The new ‘native’ object in OpenRTB 2.3 specifies all of these. The standard supports five different types of layout, allowing ads to appear seamlessly in different contexts such as chat lists, news apps, app stores, social feeds, and more. And because formatting is standardised, publishers can be confident that branding and other crucial elements will be displayed as intended.
The impact on native
At a stroke, native advertising gained the benefits and scale of automated trading without losing the edge that context, relevancy, and content-quality gave it. By the end of 2015, 15% of all native campaigns were already being traded programmatically. "Programmatic advertising is about delivering an organic, personal ad experience, and native is a natural outgrowth of that capability," says Tim Sims, VP of inventory partnerships at The Trade Desk.
As this volume grows, the industry expects demand for native content to rise rapidly – making content more relevant than ever. Research by Yahoo predicts a 156% growth in the volume of native advertising traded in Western Europe by 2020. On the other side of the Atlantic, PwC estimates that by 2021 native advertising will account for 74% of the US market for display advertising. Business Insider estimates that global spend on native advertising will rise to $21 billion by 2018.