ARCHIVES: This is legacy content from before Marketing Dive acquired Mobile Marketer in early 2017. Some information, such as publication dates, may not have migrated over. Check out the new Marketing Dive site for the latest marketing news.

Native ad budgets to jump in 2015 as programmatic takes off

While only between 10 percent and 30 percent of mobile ad budgets currently go to native ads, the number could reach as high as 50 percent next year as programmatic native platforms and inventory begin to proliferate. 

Native advertising and programmatic buying are two popular buzzwords in mobile, with promises of helping marketers unlock significant potential to connect with smartphone users in more meaningful and efficient ways. In a sign of where things are going, eBay is reportedly launching a number of native ad formats on mobile that will be available via programmatic buying in 2015. 

?At Fetch, we are seeing approximately 10 percent to 20 percent of our clients spend on native advertising,? said Tim Villanueva, director of media at Fetch. ?The advancement of programmatic methods to purchase native advertising will accelerate investments in this format as marketers look to find less intrusive ways to connect with their audiences on mobile.?

Bigger budgets
There has been a lot of talk about native programmatic advertising on mobile for more than a year now, but the space seems poised to finally take off thanks to a number of developments. 

This year, companies such as OpenX, InMobi, Rubicon, Xaxis and Disqus have all made moves into enabling programmatic buying for native advertising. 

There are signs that native programmatic is growing already. 

?Currently I would say about 20 percent to 30 percent is spent on mobile native ads given conversations I have had with other marketers and from what I have read,? said Shawn Aguilar, digital marketing manager at Tapsense, which launched a native ad solution for publishers available via programmatic demand this year. 
www.tapsense.com

?I personally think we will see anywhere from 40 percent to 50 percent on native ads on mobile in 2015,? he said. ?The reason I think this is due to the reach and scale that LinkedIn, Facebook, and Twitter have with their platforms. 

?I think having scalable inventory available via programmatic would dramatically rise up spend on native.?

Monetizing mobile
Since native ads have been one of the success stories on mobile, they often command higher pricing. This means publishers may be better able to monetize their mobile strategies if native ads take off with programmatic. 

?The biggest opportunity for publishers is the chance to better monetize their app while delivering ads that feel like a natural part of the user experience,? Fetch?s Mr. Villanueva said. ?Because native ads can perform better than standard units, publishers can charge higher eCPMs to advertisers.  

?Also, one single implementation can open up their inventory to a larger selection of demand partners, while providing the control via an on-demand interface to manage and streamline the delivery and payout process,? he said. 

Reaching scale
While initial efforts in mobile advertising simply replicated the desktop experiences, shrinking it down for smartphone screens, marketers are increasingly interested so-called native experiences, where the advertising is integrated into the overall experience. 

Often, this takes the form of sponsored content or ads that look like posts appearing in-stream in a social media user?s news feed. 

Facebook was one of the early proponents of native advertising, with others now looking to repeat its successes here. 

One of the challenges for native programmatic on mobile is to get the strategy working at scale, which will require standardization. 

This will be a challenge with native advertising, since the goal is to get it to fit into the surrounding environment more seamlessly and appear less like a display ad. As a result, creative is often specific to a publisher. Native ads on eBay will look different than native ads on New York Times. 

In order to be able to buy native advertising in an automated fashion, different creative formats will need to be readily available. 

?I've seen a lot of bigger brands such as GE, P&G, and Mercedes doing native on BuzzFeed, LinkedIn, and Twitter,? Tapsense?s Mr. Aguilar said. 

?They continue to spend more and more so I am going to assume that they must be seeing great ROI,? he said. 

Final Take
?Chantal Tode is senior editor on Mobile Marketer, New York