2017 Native Predictions

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I and the other members of the IAB Native Standardization committee wrote our predictions for native advertising in 2017.

My notes:

Native standardization by the IAB has bridged the gap between social marketing and the programmatic display ecosystem.

At PulsePoint, our social marketing & sponsored content distribution platform used to be siloed from our programmatic offering.

Native standardization enabled us to distribute native-style display ads across hundreds of publishers, leveraging existing OpenRTB integrations.

Similarly, our DSP partners started scaling up native campaigns without worrying about the how their ads would blend within publisher content, enjoying far greater engagement and reach than with banner.

In 2017, we anticipate native advertising to be our fastest growing channel, slightly ahead of pre-roll video.

In-feed will still make up the bulk of native ad revenue, as many of PulsePoint traditional publishers focus on text-heavy or user-generated content.

We have big ambition for native video for next year. Constraints are mostly demand-side, but both publishers and advertisers are getting more comfortable with embedding video content within in-feed ads, at a substantial CPM premium over static media.”

This said, and as a few of my co-members noted, adoption of native has been below expectations in 2016.

Video is the main reason, as Kayla Wilson noted: “DSPs de-prioritized [native buys] when they realized this year was actually all about in-app video”.

Facebook exited the OpenRTB ecosystem

castle-ruins

Once upon a time, Facebook had grand ambitions for becoming an end-to-end programmatic advertising platform, capable of rivaling Google. It bought Atlas – a display ad server -, LiveRail – the leading video ad server -, launched its FBX exchange, and was planning DSP capabilities.

No more. Facebook spent the better part of this year scaling down its advertising stack to 2 key areas: selling media on its O&O properties, and leveraging its “social graph” to sell third-party media.

OpenRTB no more

In less than a year, Facebook has mostly exited the OpenRTB-based programmatic ecosystem to focus on selling direct instead.

First to get the boot was FBX. Facebook’s exchange has been moribund for years, once it became clear that Facebook would not onboard its mobile inventory. The ax finally came in January 2016.

LiveRail video platform followed shortly. Facebook terminated its third party publishers. “Too many bots to police”, the company said. Welcome to my world.

In march, Facebook abandoned plans to add DSP features to its Atlas platform, for buying media across third-party publishers, leveraging Facebook’s deep targeting capabilities.

Facebook is still mulling about programmatic native and video, where supply is cleaner and yield higher. But no more challenge to Google’s DoubleClick in the open market.

Insights into insights

So Facebook Audience Network (“FAN”) is what’s left of the company’s grandiose ambitions. The old-school network is rumored to gross $2Bn this year from 3 million advertisers, yet is no pinnacle of innovation.

Atlas will survive as an analytics and attribution platform, leveraging its social graph for better audience and cross-device insights.

Facebook  will be alright. The social network controls 20% of display inventory in the internet, and the most extensive trove of user data.

It should do more with it.

Addressing iOS users is getting harder

Today Apple announced that iOS 10 users can blank entirely their Device IDs (“IDFA”) to advertising SDKs and mobile browsers.

No short term impact

Not a big news in itself, as few users have opted in to blank their device IDs  – 17% according to a recent study, much less in our network -. iOS 9 already had a similar block feature, that still allowed advertisers to use opted-out Device IDs for cross device targeting, reporting and conversion tracking.

After today’s change, advertisers will simply rely more on device fingerprinting to uniquely identify iOS users that opted out of sharing their Device IDs.

But once more Apple is tightening the screw on programmatic advertisers.

A worrying long term trend

Safari has long been a cookieless environment, and the iOS app ecosystem it taking that direction.

Clearly, advertising platforms should start looking seriously into fingerprinting technology and location-based profiling, to ensure iOS users can be addressed in the long run.

Device fingerprinting to the rescue

AdTruth, and BlueCava offer technology to probabilistically identify a device based on its physical characteristics, IP patterns and other behavioral factors.

These vendors claim to be a reliable substitute for the hardware’s Device ID in 94% of cases. Our internal tests have shown a lower but still acceptable match rate within our network.

Alternatively, Augur.js in an open source library to do device fingerprinting. We haven’t tried it, but worth considering.

 

 

 

 

 

 

OpenRTB 2.4: a few good ideas and many missed opportunities

ORTB24OpenRTB version 2.4 is now released. While not a major upgrade by any stretch, the new protocol does introduce several new features that will bring clarity to programmatic transactions.

Support for Audio-only ads has been the feature most talked about. Podcasters and music apps will definitely welcome the addition, but few publishers will benefit besides this niche.

Another widely anticipated feature is video skippability, now included in bid requests. Publishers can indicate pre-bid if a video ad can be skipped, and under what conditions.  PulsePoint will encourage its publishers to send this flag, in order to bring more transparency to video buy.

Those concerned with brand safety can rejoice. With 2.4, buyers can indicate in their bid responses, if their creative is suitable for either young children or adults, which may help with ongoing monitoring of buyer performance in the long term. PulsePoint, like most platforms, rely on third party vendors and manual checks to ensure compliance of creative with what’s requested. Obliging advertisers to systematically indicate the media rating of their creatives will make it easier for all parties to monitor compliance and flag violators.

Not all of the 2.4 upgrade is augmentative, as the IAB is removing some flexibility in resizing banners. Prior to this new version, maximum and minimum sizes could be specified; however recently, the IAB opted to mandate a list of exact banner sizes, reserving the resizing of banners exclusively for native impressions. This signals that IAB now sees banner as a single purpose ad format.

Finally, IAB added 6 attributes to the content section of the bid request, including the artist and genre of the content where the ad will appear. However, I doubt this will be of much use. The content section is rarely populated on PulsePoint exchange, and even less often consumed by buyers.

A few disappointments.

The IAB trumpeted increased support for location in 2.4, however this is quite a stretch. The new lat/long accuracy parameter (designed to specify the accuracy of the device that generates the location signal) will be of little value, as precise lat/long are used by geofencing campaigns which aren’t effected by the discrepancy of a few meters. More importantly, since the device of the GPS is often passed along, geofencers already have a sense of the accuracy of the GPS, and probably won’t trust what the publisher sent through the bid request. Knowing the IP geolocation provider will be of even less value, as most DSPs will keep using their own vendor lookup.

Despite some actions to enhance the monitoring of compliance, OpenRTB 2.4 still fails to mandate a maximum time lapse between a bid request and when the creative is finally delivered. We’ve seen bots circumventing quality filters by holding a creative for a few minutes and releasing them in batches, taking advantage of a hole in OpenRTB specifications. This topic caused many discrepancies between platforms and advertisers as well, yet OpenRTB 2.4 only added a recommended maximum time lag. PulsePoint will strongly suggest its buyers to provide this maximum lapse with each bid, and we are considering contractual wording to define liabilities accordingly.

Quickly implemented, quickly forgotten.

It appears that the most significant change may be the specs’ upgrade for native. This comes up in a different specifications document: The Dynamic Native Ads Protocol. The main OpenRTB protocol is unchanged, only referring this Native API.

PulsePoint will become 2.4 compliant right after the specs are finalized. Mostly because this is expected from a leading exchange, and less for the business value of the upgrade.