2013: What Is in Store?

Programmatic premium + native ads lead the way

This summer I ran into a friend at a ho-hum conference in midtown – the energy in the room was markedly low, which at first I was willing to chalk up to summer sluggishness. However, as we were chatting, I realized it was something more – we both commented that there wasn’t anything all that exciting going on in the industry. Following the wide embrace of RTB, the rise of the DSPs and SSPs, the rollout of DMPs and so much rapid development, if felt like we’d fallen in a lull during the first half of 2012.

It had been a while since we really heard about a major technological leap – all the news seemed to be about incremental fixes. Even the evolving mobile space seemed stuck in a rut, merely working out kinks (serious kinks, but kinks nonetheless). It made me wonder if digital advertising professionals – and the journalists that write about their exploits – were spoiled by breakneck growth, but the madness had passed its apex.

Predictions of stunted revenue growth in 2013 only added to the feeling that, gosh, maybe this is it – the industry is normalizing… (Unimpressed face.)

Fortunately such shallow fears were unfounded as the ecosystem had a serious mood swing during the latter half of the year – there were plenty of things to be excited about! Reasons to attend conferences besides networking and drinking with the same old so-and-sos! 

The two trends that really lit a fire under the industry’s collective ass were programmatic premium and native advertising. Yes, I know you’re sick of hearing both of those terms – don’t bash your head against your keyboard because you can’t take it anymore, because believe it or not, the two tie together and will be major forces propelling us into and throughout 2013.

Prime Time for Programmatic

Programmatic isn’t the new kid in town anymore – it’s here to stay and is only going to grab more share. And both advertisers and publishers are learning to take make the most of their assets (read: data) and increasingly experiment with programmatic channels. 

On the wrap-up panel at OPS this past October in New York, Kellogg’s Bob Arnold illuminated how brands are seeing the advantages of programmatic buying and embracing tech solutions. On the other side of the fence, The Weather Company’s Curt Hecht explained how the multichannel operator is increasingly approaching advertising as a data company with media.

Keynote Panel 2 Teaser from AdMonsters on Vimeo.

(By the way, paid members can watch the full-length video of the panel as well as other keynotes – no “Die Hard,” “Bad Santa” or “Scrooged,” but not bad holiday viewing.)

This is leading to bigger and better things – namely programmatic premium. If you didn’t get a chance to read my tome on this topic, WHAT’S WRONG WITH YOU?!? READ IT NOW! What? You’re busy doing holiday stuff with your “family”? Ad tech is your family! Your mother is an ad server!

Sorry, sorry – this time of year gets to me a little. Programmatic premium is the marketing nomenclature for tools (mainly publisher-fueled) that push the notion of programmatic beyond RTB. Most notably, these are programmatic guaranteed and private exchanges, which provide paths for publishers to move higher-quality inventory into automated sales channels and offer a more efficient transaction experience. Oh yeah, you can also imbue the process with some (all?) of your fine, fine data.

While publishers and advertisers are still experimenting with these channels (arguably, progress is needed on inventory transparency and goodness knows what’s happening with viewable impressions), in the near future sales of just about any standardized ad unit – whether its display, video or rich media – will flow through programmatic channels. Answers.com President and COO Peter Horan estimated earlier this year that 75% to 80% of all media would be bought in an automated fashion.

So what about the remaining 20% to 25%? Well, that’s where we get native.

Look! Another Article About Native Advertising

Rick Webb, cofounder of the Barbarian Group and currently the chief sales consultant at Tumblr, gifted us with a hilarious and insightful presentation at OPS in October. It was a real coup for AdMonsters, as the formerly revenue reluctant Tumblr has stood out as a leader in this native advertising craziness.

OPS NYC: Tumblr Teaser from AdMonsters on Vimeo.

And it was particularly fortuitous that the Funny or Die guys – definitely tops when it comes to branded digital video – took the stage soon after.

Funny Or Die Teaser Edit 2 from AdMonsters on Vimeo.

It seemed like everybody and their grandmother jumped on the native train in 2012 – who didn’t introduce a native advertising solution or claimed they’d been doing it for years, YEARS? (I’d argue StumbleUpon has been up on this since the beginning of its monetization.) But that left the question… What the hell is native advertising? You might have noticed there’s little agreement.

Well, at the Publisher Forum in Sonoma in March 2013, we’ll have a few people that will shed some light on the subject: keynote Todd Sawicki, startup investor and adviser and former CRO of Cheezburger, believes that native is the future of digital advertising and represents a tremendous chance for digital strategists to influence the next steps in the industry’s evolution. Also, Buzzfeed has blown away most of the industry with its highly effective and scalable approach to native advertising – Director of Operations Eric Harris will speak to the workings behind the scenes.

These two are just a few of the amazing sessions at the next PubForum: Forbes.com President and Chief Digital Officer Mike Smith has a lot offer on “Programmatic Preparedness”; The Weather Company’s Bill Murray cites his experience during Hurricane Sandy to explain how revenue operations can be agile in real time; and Advance Digital’s Kerel Cooper will share some wisdom on another trend I see exploding in 2013 – publisher audience extension.

But back to native – I’ll see what I can do to alleviate the confusion for the moment. Native falls into a few camps – the first is what brands and advertisers call content marketing or branded content, where the line between editorial and advertising is blurred in a way that’s endemic to the host publisher. However, we’re not talking about advertorials, which are advertisements written in editorial format. “Sponsored content” is a gray area – the brand really should be active in the content.

A great example of this is this Kia commercial made with Funny or Die in which scientists (“Dunkologist” Jeff Goldblum) try to make a car dunk over NBA star Blake Griffin.

Think of it as an evolution of product placement – product involvement. (I could say “product engagement” but I think I’d have to slap myself for using the loathsome e-word.) You could even say what you’re reading now is a piece of native advertising as I’ve seamlessly embedded AdMonsters event marketing into my industry analysis. Well, I’d like to think it’s seamless…

The other major form on native advertising is custom site integration. Of course, one of the big highlights of the year in ad tech was Facebook’s opening its inventory to DSPs. Riddle me this: Would you label Facebook inventory as premium? Because it’s certainly native – and is bought and sold programmatically. Custom site integrations run the gamut from incredibly complex to simple and straightforward; the main idea is the unit is endemic to the site and won’t be found elsewhere.

As Foundry Group’s Seth Levine noted in our Programmatic Premium piece, these new forms of native advertising definitely have the potential to be sold on automated basis. That’s only one way these two trends tie together.

Buckle Up for 2013

No, native advertising is not something new, but it represents a new line of thinking around premium advertising – beyond the banner. Display advertising is not nearly effective enough to justify the costs and work that goes into making it function. The influx of programmatic buying into what we now refer to as premium will make the buying and selling process much more efficient. It will also effectively commodify display inventory, forcing players across the ecosystem to examine increasingly innovative forms of advertising – forms that offer true engagement for advertisers and consumers; forms that will finally draw the big brand dollars. Native advertising efforts at Tumblr, Buzzfeed, Gawker and others are a bold step in this direction.

I don’t believe the banner (or its many variations, such as expandables) is going away, but I do believe it will be bought almost exclusively on a programmatic basis. Sales teams may get smaller – programmatic guaranteed essentially offers a streamlining of the digital ad sales process – but they will still be essential in maintaining client relationships and, more important, selling the new premium.

Native advertising and programmatic premium are the start of the wild ride the digital advertising industry will take in 2013. And AdMonsters will be along with you on the journey. To finish up this piece of native advertising, here’s a list of AdMonsters events in 2013 – I expect to see each and every one of you at each and every one.

March 3-6: Publisher Forum – Sonoma, CA

April 4: OPS Markets – NYC

April 24: OPS – London

June: Publisher Forum – Berlin

July 18: OPS Mobile + OPS TV – New York

August 18-21: Publisher Forum – Boulder, CO

September 26: OPS – NYC

October: OPS – Germany

November 10-13: Publisher Forum – Scottsdale, AZ

November: AdMonsters Screens – London