Programmatic native is a term much more frequently being used in the digital advertising space, thanks in no small part to the regular technological developments taking place, allowing it to become a much more standard advertising platform. However, is the industry truly ready to give programmatic native attention? Ally Stuart (pictured below), strategy director, Sharethrough, explains to ExchangeWire how the huge opportunities that exist within native make it well-placed to be a prominent part in any digital strategy.

ExchangeWire: What will OpenRTB Native 1.1 mean for programmatic native?

Ally Stuart: When it was passed in March 2015, Native 1.0 (which was included in the IAB’s OpenRTB 2.3 update) identified native as its own separate ad object, creating an industry standard for what defines a native ad: headline, URL, description text, image, and brand name and logo.

Native 1.0 set the standard, putting an end to the concern that native couldn’t scale. It was, however, always intended to be more of a generic framework from which to build.

OpenRTB Native 1.1 was passed earlier in 2016 as part of the 2.4 spec and improved upon that start. Most importantly, it brought greater specificity and structure to programmatic native through better classification of where in the feed the native unit will be placed and what type of feed it will be placed into (content, product, social). It provided clarity for how images should be handled and allowed brands to better integrate a range of different headline lengths and image sizes in their campaigns.

As these standards become more streamlined with each new round of IAB specifications, the wider meaning of it all is making programmatic native as easy to buy for agency buyers and trading desks as any display unit. It’s a goal we’re getting close to and, with each new step, will help native demand scale even more broadly.

Are publishers ready for programmatic native? What do they need to be aware of?

Publishers’ programmatic strategies have become more sophisticated and matured, way beyond their remnant inventory. Programmatic native adds another string to their bow, bringing along new opportunities to drive higher CPMs, especially in previously difficult environments to monetise, like mobile web.

Tools, like private marketplaces, allow publishers to scale native revenue while giving up zero control over quality or price; they benefit from their own proprietary audience data, and enable them to keep fostering important buyer relationships.

If publishers are working with an SSP, like Sharethrough, that supports real-time templating for native, their technical work is also already done. For other SSPs, publishers should be aware that extensive work can be required to handle the metadata for native set out under the RTB spec.

It’s unlikely that advertisers will be able to generate new budgets for programmatic native, so where do you expect budgets to come from?

Ally Stuart, Strategy Director, Sharethrough

Programmatic native will be a clear benefactor of the general growth digital advertising is experiencing, with spend growing steadily and expected to pass TV soon.

According to Business Insider Intelligence’s latest industry report, native display has already overtaken traditional digital display in the US, growing to an anticipated 80% market share in the next five years. Whilst we are a couple of years behind, this gives a clear path for where the European market is headed.

Programmatic is also opening up new strategies for native campaigns. Brands are allocating spend to programmatic native as a separate channel within their broader digital campaigns, utilising its ability as both a performance advertising tool, and its ability to seed positive brand messages through the headline at the moment of impression. Programmatic native won’t eliminate display, but it is already seen as an important stake of any successful digital strategy and this will only grow in significance.

Lastly, on a very micro level, FBX being shutdown presents a short-term boost in RTB budgets as traders look to take these same assets and run them across open exchanges.

How do emerging platforms, such as Pinterest and Snapchat, impact programmatic native?

Innovations from closed platforms, like Pinterest and Snapchat, have been a net benefit for the native ad space. Snapchat’s vertical video innovations have paved the way for an entirely new native format that you’re seeing being adapted now for the open web. Sharethrough aligns itself with closed platforms like Pinterest, Snapchat, and other social giants, such as Facebook and Twitter, in believing that user experience matters when it comes to advertising. We’re in favour of that.

At Sharethrough though, we’re huge proponents of the power and need for an open internet and giving publishers the right tools to invest in the future. It isn’t an either/or between spending on native ads through Sharethrough, or closed platforms like Pinterest and Snapchat. We’re part of the same broader ecosystem; and we’re seeing a lot of forward-thinking brands use things like content pixels to optimise their closed and open-exchange ad spend to achieve results greater than they could if they were just investing in one or the other.

Programmatic native is still in its early stages – what journey do you expect it to go on in the next 12-18 months?

Native is the highest-impact format we’ve ever seen. It is now as easy to buy as any display format and it can be executed with the same precision and scale; 2017 is the year that all of these pieces come together.

2017 will be the year where the benefits of growing market maturity in the native ad market, and recent integrations, will really start to become obvious. It’s been clearly established that, in our increasingly mobile-dominated media climate, native ad units are the only high-impact way to reach the growing cohort of people who are now uninterruptible.The need is there and the infrastructure has been put in place.

Video is another area of huge potential for native. Carat predicts that online video will grow 44% in the UK this year, being the most significant driver in total market growth. Native video, an in-feed silent auto-playing format where the video is accompanied by native metadata (headline, brand name, and logo), is included in the OpenRTB spec and is now available to buy programmatically. As well as being an effective strategy for brand advertisers, this offers an exciting opportunity for publishers who don’t create any video content themselves to open up new streams of demand.