Is Header Bidding the Key to Programmatic Native?

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This post is an excerpt from our latest header bidding white paper. Click here to download the whole thing and learn what’s next for header bidding!

At a time when both advertisers and publishers are increasingly focused on improving user experience, native advertising is poised for exponential growth, as they advance that goal in a few different ways:

  • Native ads blend in with the look and feel of a given web site, providing maximum relevance to the consumer without disrupting what they’re doing online.
  • Native ads generally have more content – and not just that, but more engaging content as well, further increasing the relevance to users.
  • Native ads are lightweight and rely on very little Javascript, which means they load faster. They’re also responsive, so they look great and load smoothly no matter what device the user is browsing on.

 

This creates a win-win situation for all involved: consumers get a better user experience, publishers enjoy a more engaged audience with higher CPMs and advertisers deliver more effective ads that match the content people are consuming.

 

Native is growing, but programmatic native lags behind

 

Just this year, total native ad spend is expected to grow 36% to $22.1 billion. However, the vast majority of this spend is coming through pre-negotiated direct deals, meaning almost everyone is missing out on programmatic’s superior targeting and scale, as well as the increased competition it brings to the table. As a result, programmatic native CPMs are still relatively low.

While there are a few walled gardens that do programmatic native well, most providers function a lot like ad networks did ten years ago, taking huge cuts without adding much value. Certainly, programmatic native requires more technical work than traditional display, as advertisers and publishers must work together to ensure that the creatives fit the unique style of each site they run on. Still, this challenge is far from insurmountable. In fact, we believe that the programmatic native market will take off once publishers begin adopting header bidding.

Here’s why: By adding more players to the auction,
header bidding can open more points of competition in the native programmatic market. As a consequence, existing programmatic providers will be compelled to lower their take rates, making programmatic native a more attractive option for publishers.

And once that happens, the entire digital ecosystem will be better off. As header bidding creates a real-time marketplace for native ads, more and more brand dollars will flow into the space, creating a superior user experience filled with better, less interruptive advertising. Not to mention, this is premium inventory that’s already fetching high prices in direct deals. Bringing more buyers into the space will increase competition and drive that value even higher for publishers.

Download our full guide to the future of header bidding to get more details on what publishers can do to make header bidding for native a reality.

Filed under AppNexus Updates, Technology.

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