Paid Advertising: Programmatic Ad Buying vs. Native Advertising

After reading the title of this blog, the first question I want to pose to the audience is, are you confused? If the answer is yes, that is okay and we are very similar in that regard. When I first heard the words programmatic ad buying and native advertising I was also a novice and didn’t have a very good inclination as to what those two topics were. That being said, the next point that I want to pose is that programmatic ad buying and native advertising are not similar in concept, not even close actually. They are two completely different paid advertising styles that both claim they are going to have a big presence in paid advertising’s future; but the question then becomes, how is that possible when they are two gravely different techniques? Before we jump into that topic of discussion, let’s start by introducing each of these paid advertising strategies and what they are all about.

Programmatic Ad Buying
Like stated previously, this is a topic that I find very confusing and the primary reason being that even experts cannot agree on a definition for the concept. It would seem that programmatic ad buying means something a little bit different to everyone. Adweek says themselves that when it comes to programmatic ad buying, “there are lots of definitions, and no real consensus.” So to simplify, I want to share the definition given in Adweek that I found the most understandable and straight forward when trying to make sense of this concept. Allie Kline, who is a CMO of AOL, states, “For me, it about using an automated system to make media buying decisions instead of doing it manually. A brand could take its goals, inventory data, consumer data, ad formats and potential media and put it all into a washing machine. Programmatic takes multiple data points and makes decisions about what screen an ad should be on, what is the most effective strategy at a given moment, and lets you do all the nonmanual decisions. Another concise definition that Adweek offers is that programmatic ad buying is “the idea that machines will simply handle all of the process involved in buying media- the insertion orders, the paperwork, the trafficking, the spreadsheets.”

Essentially what I have gathered from these two definitions is that programmatic ad buying combines multiple sets of data and metrics about an organization, and then takes that information to purchase advertising space/placement in an automated fashion and does so in real time, rather than doing it manually. That being said, an important distinction needs to be made between programmatic ad buying and Real-time-bidding. While they may seem the same in principle, programmatic ad buying adds an element that RTB does not and that is all of the consumer data that it takes into account when purchasing sites, impressions, or whatever it might be. Kline once again offers some insight on this point of differentiation when she says, “The way we think about programmatic is very different than just a selling media in a bidded environment…if you think about programmatic as using data, tech, and software for getting more for every dollar spent, that really elevates our clients thinking.” From this statement, it is clear that there is a line separating RTB and programmatic bidding, and this should be a caution to all organizations looking to employ a programmatic ad buying strategy; it is a complex process that involves data and technical elements, and cannot be viewed as simple minded as RTB.

Native Advertising
Native advertising is somewhat on the flip side of programmatic ad buying, in that it does not involve any sort of automation; it actually involves steps that are quite the opposite. As defined by sharethrough, native advertising is, “a form of paid media where the ad experience follows the natural form and function of the user experience in which it is placed.” In other words, native advertising “matches” the visual look of “natural content” and “functions” just as natural content might, yet it is an ad. It is clear from this definition as to why native advertising is very much different from programmatic ad buying; native advertising is not at all automated. People have to produce very carefully made and refined ads that match the editorial content that they will be integrated into. Ad space cannot be purchased via automation because it has to be carefully selected so that ads can be integrated successfully.

If you are like me, your next thought might be that this process is somewhat deceiving. Marketers are trying to produce content that looks, feels, and “functions” as natural content in order to make advertising more subtle, genius idea that is met with some pushback. As marketers, we are all aware of the difficulty that is “breaking through the clutter” and getting consumers to pay attention to an advertisement that is undoubtedly one of multiple they have seen that day. This is where the idea of native advertising comes in. Native advertising is seeking to “seamlessly integrate branded relevant experiences into publications,” but at face value many readers/viewers feel they are being tricked; they think they are reading an editorial content piece, however it is really advertising in disguise.

An article by Advertising Age poses a publishers dilemma perfectly when it comes to native advertising. The article, “states, having a clear dividing line between editorial and advertising content intuitively helps people trust the journalist integrity of content they are presented. If people trust the source, they read more, and this attracts advertiser dollars.” From a publisher’s standpoint, it is a difficult decision on whether or not to allow native advertising. On one hand you have a large following and marketers will pay large sums of money to have access to that audience. But on the other hand, the reason you have that following is because people trust you as a source, and offering native advertising could jeopardize that trust.

Organizations can benefit from native advertising because it can offer access to large audiences and be a form of advertising that people are more receptive to, primarily because the brand is “integrated” into the editorial content. That being said, and in my personal opinion, I am skeptical about the use of native advertising as a paid marketing strategy because of the negative connotations that surround the topic. Like stated previously, native advertising can be seen as trickery and deceiving because it takes on the feel and function of normal content, and thus can be hard to distinguish from actual content. While this may seem appealing to organizations and marketers, I offer a word of caution. Consumers do not take kindly to being tricked or deceived, and it could ultimately end up hurting the brand more than it would help.

The Future of Paid Advertising
I briefly touched on this idea earlier; these two types of paid media strategy are very different, yet people claim that both of them are going to be greatly involved in the future of paid advertising. From the perspective of programmatic ad buying, this strategy is all about automation and using data, software, and technologies to purchase ad sites/impressions that will be the most optimal. Organizations can benefit from employing a strategy such as this one because it greatly increases efficiency and lets the data do the talking. Programmatic ad buying combines inventory data, consumer data etc. and this will ultimately combine to be a more objective technique in paid advertising. On the other hand, there is native advertising which is quite different in that it is not automated at all. People, not software and computers, are making deliberate and meticulous ads that integrate “seamlessly” into content. The location/space of ads cannot be chosen via automation and real time techniques because the ads have to be placed in the editorial content that they are being designed for; this is the concept that fuels native advertising. Like discussed above, native advertising is a great way to gain access to large audiences that publishers have acquired and advertise to audiences in a very “native” and “natural way.” Organizations could benefit from this strategy because it is incredibly more subtle than traditional advertising and does not immediately identify itself as marketing. That being said, this technique can be deceitful to the audience and could tarnish a brand reputation if the audience felt they were being tricked.

But all of this being said, what is the future of paid advertising; programmatic buying, or the meticulous and careful creation of ads that make up native advertising? In my personal opinion as of right now, I would say the future of paid advertising is headed more in the direction of programmatic ad buying because that strategy is already growing in money spent and has support, where- as native advertising is lacking in this area. Amount of support and positive metrics an advertising strategy has is huge in the adoption of strategies by organizations, because organizations don’t want to devote advertising dollars to techniques that are not successful or are not backed by hard evidence of potential. Forrester’s piece on programmatic ad buying states, “In reality, I think we are only starting now to truly see programmatic methods and techniques adopted by ad sellers and buyers. Finally in 2014 we have seen marketing leaders driving their digital media buying practices forward by combining rich customer data with algorithmically driven buying platforms to make digital advertising dollars more effective in reaching target audiences.” From this brief quote it is clear that organizations are starting to find the value of combining data with these software platforms and how efficient that strategy can be both in terms of money and reaching the target audience. Organizations are all about efficiency and this is a key reason I feel that paid advertising will move more in that direction. That being said, almost the opposite is true for native advertising; it is not yet backed by research and support so there are many skeptics of the method. In my personal opinion, I do not see native advertising being the future of paid advertising because of the negative connotations that are associated with it. As I learned in a podcast about native advertising, this concept can really get companies into trouble because people feel they are being deceived; just as the mother of a 9 year old boy did when she found out her son was being interviewed for an advertisement, rather than what she was told/understood. In addition, for the reasons I have mentioned about native advertising, I would not recommend that organizations more forward with native advertising, I would recommend programmatic ad buying. Native advertising as a marketing strategy clearly causes organizations issues with transparency, and I do not think it should be applied until there is way to do it in such a way that allows for “seamless integration” yet no deceit.

All of the quotes and statistics for this blog post came from the following sources:
Adweek
Forrester Blog
Advertising Age
Native Advertising Podcast
Native Advertising: Sharethrough 

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