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Is Native Advertising the Cure for Banner Blindness?

infolinks, March 19, 2013

Alongside “social”, “mobile” and “RTB”, “native advertising” is probably one of the hottest buzzwords today. Native is viewed as a cure for a lot of what ails the online advertising industry. Ads that are unique to a particular site or platform by definition also tend to match the look, feel and voice of the site that hosts them. Native ads tend to be content-based, and, because they blend so neatly into the content that surrounds them, are likely to perform very well. It seems that native can address a lot of the issues facing our industry today – but is it a perfect solution?

I’ve spoken and written a great deal recently about the problem of Banner Blindness, which impacts advertisers and publishers alike. According to our own survey results, only 14% of consumers surveyed found ads served to them as relevant. Half of the respondents never click on any ads, and 35% click on less than 5 ads a month. By the numbers, Banner Blindness adds up to fewer leads for advertisers and lower revenue for site owners.

A large part of the problem can be attributed to predictable placement. Display ads typically run as a leaderboard across the top of the page (728×90), embedded in content as a large rectangle (300×250) towards the top of the page. These placements haven’t changed in a decade , so consumers have inferred that there’s nothing valuable in these regions of the page, and their eyes are trained to scan elsewhere for engaging content.

ther critical issue is relevance. Ads rarely seem targeted to the current intent of the users who encounter them. The industry is so caught up in the use of Big Data, user profiling and programmatic buying that we have accepted a high rate of targeting error, flimsy estimates of in-market frequency, and the appalling lack of relevance to the user’s task at hand. Just because people showed an interest in a product at some point in the past does not mean they want to engage in product consideration or purchasing behavior when they are engaged in another activity, even if they are still technically in-market. Stated more simply, context matters.

With respect to these issues, native advertising appears to be a solid solution. Placement directly in the newsfeed on sites like Facebook or Twitter reduces a user’s ability to predict ad placement. In Google AdWords, one of the earliest examples of native advertising, targeting is keyword-based and therefore directly relevant to the users’ real-time intent. In the case of individual publishers who “roll their own” native solutions, they are typically customized to be relevant to their content, making the advertising real-time targeted to the user’s specific task at that moment.

While native solves many of the problems in online advertising today, there are some complications that still need to be addressed. One of these is scale. By definition, a native ad unit is unique to a particular site or platform. For advertisers, that means the wheel must be re-invented for every site, from the ad creative, to the targeting specifications, to the buy itself. There is no standardization, so more legwork is required. On the publisher side, this means a lot more work as well – custom insertion orders, custom code, and direct sales, for starters. To be profitable, many publishers must charge premium rates for native advertising, but they must have the traffic and quality audience to justify those rates. For this reason, native will likely only be feasible for larger publishers who are likely to have the direct sales force and administrative resources to support it.

Companies doing it right address the scale issue by doing real-time contextual analysis on every page load, and their systems assess the presence of user intent and the matching desire of an advertiser to target that intent, all in real-time. Some also serve ads as overlays, which gives them two controls most ad servers don’t have: retaining the option to serve nothing if the relevance isn’t there, and delivering the ad in a non-traditional location to overcome banner blindness. Think Google Ad Sense with the flexibility to serve in unexpected locations or not serve at all (full disclosure: Infolinks offers these solutions).

Native advertising is a great solution for many advertisers and publishers, but it can’t address scale until the platforms offering it reach critical mass. To solve the problem of Banner Blindness, publishers and advertisers need to think outside the standard placement – and perhaps think more deeply about relevance.

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