In the early days of mobile & co., app developers usually only focused on attracting new users in order to gain an international foothold. This resulted in intrusive mobile advertising, which in turn led to low dwell times and forced the market to rethink.
The result of this rethink was the rapid use of native ads, which have the ability to be both effective and less intrusive for the user. Impressive figures, such as those from Facebook with improvements in the engagement rate of up to 60 percent and a threefold increase in retention rates, increased interest in native ads. The limited screen space, which is actually a disadvantage of mobile devices, also helped to push through native advertising in the mobile sector: With so little room to place banners, ads have to integrate better into the given format, which was previously occupied by editorial content. In fact, according to Business Intelligence, native ads show higher engagement rates in the mobile sector than in desktop-based applications.
However, despite their increasing popularity, programmatic mobile native ads have yet to see rapid growth like other mobile ad formats such as video or interstitial ads. This raises the question: why is this the case and when can we expect programmatic delivery on a large scale?
The long road from time-consuming "native" to "programmatic native"
Even though native ads are very effective, there is a catch: they have to be placed in a conventional, non-programmatic way. To make a native ad truly "native", the ad must adapt to the format of the respective medium - and of course each platform presents its content in a different way. As a result, native advertising is a very time-consuming process that has to be set up anew for each platform. At the same time, this has also meant that channels with a particularly large reach and strong targeting options, such as Facebook and Twitter, have taken a large share of the market.
The compulsion to work in this way restricted the growth of the native advertising industry enormously. For other formats, such as banners and interstitials, programmatic media trading opened up the market to a larger number of publishers and advertisers by making ad placement in the mobile sector more cost-effective and transparent. The next logical step is to offer and buy native ad bookings programmatically. But what is stopping advertisers and publishers?
The future of mobile native advertising
Mobile native ads face two fundamental challenges in 2016:
1. no uniform standard formats available to date
The confusing number of competitors in the mobile advertising sector as well as the different platforms, systems and advertisers make it difficult to define uniform standards for various reasons. "Native" is a very broad term with a wide variety of definitions - most publishers have their own versions of native ad formats and correspondingly different views on how and whether standard formats should exist at all.
2 Facebook and Google are enthroned on their "ivory tower"
With its enormous reach and highly developed targeting options, Facebook is hard to beat. As a result, the majority of advertising capital flows directly to Facebook and its subsidiaries such as Instagram. Facebook's dominance makes it difficult for many competitors to enter this market and to create any kind of standards at all, as the market is heavily skewed in a certain direction.
In summary, these two challenges mean that while the standardization of mobile native advertising is only a matter of time, publishers still need to learn how to market to their audience outside of Facebook and Google.
Slow process until standardization
Even though the Interactive Advertising Bureau (IAB) has already published a "Native Advertising Playbook", it is unlikely that the market will see significant changes this year that are far-reaching enough to introduce general standards for native advertising. Most likely, the native ad formats introduced by Facebook and Google will become the quasi-standard for native in-app ads due to their dominance of the market in terms of app monetization (on the supply side) and ad spend (on the demand side). As a result, smaller providers are following suit and copying the format - which is already happening, both at the ad platform and app developer level.
While the IAB is already working with industry players to standardize native advertising, it is an ongoing process. One of the things that will come with a standardization of common practice is that advertisers will know exactly what the end product is (what it looks like, how it works). Once these standards are established and publishers understand their audience, there is nothing to stop mobile native programmatic from being offered at scale. However, before a proven method is established in practice, native programmatic faces the challenge of realizing its full potential, as standardization is the cornerstone of programmatic buying and selling.
About the author
As Vice President of Media Relations, Robert Wildner is responsible for the Glispa Global Group responsible for the development and management of glispa's app monetization solutions, Ampiri and gNative. Wildner has over ten years of experience in mobile advertising, ranging from account management and client relations to business development and operational management. He was also glispa's first full-time employee at the Berlin headquarters in 2008 and played a key role in building the company from a digital startup to its current status as a full-service mobile advertising solution.