What are Programmatic and Native Advertising?

Traditional advertising is becoming less beneficial to marketers simply because consumers hate being interrupted. So how do we still reach them as marketers? Programmatic ad buying and native advertising are two beneficial ways to reach customers in a less intrusive and interruptive way. Though programmatic and native advertising share some similarities in their advertising strategies, they still have distinct differences that make each of them beneficial in certain interactions with customers.

Programmatic is a rapidly growing aspect of automated advertising with companies like Google and P&G spending a significant portion of their advertising budgets on programmatic advertisement. According to the article Digital Media Buying Gets The “Programmatic” Makeover, P&G is trying to buy 70% to 75% of their digital ads through programmatic advertising while Google is striving to spend 60% of their digital marketing budget on programmatic advertising. The fact that both of these huge companies are spending significant amounts of their budgets on programmatic advertising indicates its growing importance in digital marketing. Here’s a quote from AdWeek on programmatic that states, “The fact is, programmatic is a fast-growing part of the buying and selling of media. How fast? This year, eMarketer predicts that advertisers in the U.S. will spend $3.36 billion on a thing called “real-time bidding,” up from just shy of $2 billion in 2012.”

Programmatic uses multiple data points on a given customer and targets what outlet would be most effective to advertise on. For example, previously if a marketer wanted to target males ages 18 to 34 they would potentially choose to advertise on ESPN to reach this target. However, by advertising only on ESPN, they would miss out on a large portion of the segment that doesn’t visit ESPN. Using programmatic advertising, the marketer can target males ages 18 to 34 and can advertise to them on multiples sites because of the analysis that allows the software to track stats from multiple sites. Programmatic ads can also be filtered to individuals in specific regions that a business would want to target. Essentially, programmatic is marketers buying specific audiences by filtering through data to figure out the right ad, the right person, and the right time – using an automated process.

In our digital age, it’s hard to find an individual who doesn’t use a number of different devices. As a marketer, how do you reach people across all platforms in a seamless way? Programmatic ad buying collects data and then makes a decision on what screen and device the ad should be displayed on which allows the marketer and the business to make the best decision in regards to advertising.

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Another type of advertising is native advertising. Native advertising combines advertising and reporting techniques to create a promotion that embodies an editorial-style. Native advertising tries to blend into content on a specific platform such as Facebook, Twitter, Pinterest. Native advertising tries to embody story telling through the creation of digital content. Native advertisement placement is important so it is displayed along with similar content and doesn’t feel like advertising.  A great example of native advertising are the advertisements that occur during a podcast called Serial and specify who Serial is being promoted by. The ads are presented by the characters and said in their own ways so they flow with the rest of the episode and don’t cause a break in the flow and instead follow the story telling aspect of native advertising. Below is an image which illustrates various forms of native advertising, promoted advertising, which can be displayed through various types of media.

  • Closed platforms are businesses that create content within a platform, then promote that content within the same closed platform. Examples include Promoted Tweets on Twitter, Sponsored Stories on Facebook, and Promoted Pins on Pinterest.
  • Open platforms are promoting the same piece of branded content across multiple platforms within the native advertising platform. Unlike closed platforms, the branded content asset lives outside the platform.

Another example of native advertising I found was on BuzzFeed. Below is an image of the homepage from BuzzFeed. The red boxes show articles promoted on BuzzFeed by specific businesses such as AT&T and Ford. These companies have reached out to BuzzFeed and paid them a specific amount to either feature or write an article that relates content back to their brand. In native advertising if an advertisement is paid for by a brand, the promoted by ____ brand has to be included in the advertisement. Below is another example from Pinterest which illustrates how native advertising would look on that platform. As you can see, the promoted travel pin blends in with all of the other travel pages on the main feed and is targeted towards users who look at travel pins and is the specific kind of target customer that a South African airline can influence to use their airline when purchasing their next ticket for a trip.

Paid advertising is an effective way to promote businesses if it’s done in a targeted way. Both types of advertising described above will cost the business money, however when weighing the pros and cons of initiating these campaigns, businesses will save time by having advertisement be automated. Also, it will be more effective, because in programmatic advertising software is used which make its decisions of where to place the advertisements based on data and trends that align with the market segment the business is targeting. Ultimately, paid advertisement will continue to grow and thrive and I see it at some point overtaking traditional marketing because it’s more time efficient and more accurate as well.

Until next time,

Sophia

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