Native advertising has been touted as the future of digital advertising and last week’s launch of the MoPub platform by Twitter is another indication how quickly the digital landscape is changing. Madan Sanglikar, Co-founder and Executive Director of ad2c agrees with assessments that native advertising is among the top trends for coming years. It is an opinion shared by even analysts. Last year, eMarketer predicted that the native advertising niche would be worth $2.85 billion by 2014. JP Morgan, in its annual “Nothing But Net” report, calculated that native ads represented just 5 to 10 per cent of Facebook’s impressions in 2013, but accounted for more than 60 per cent of the company’s revenue.
The likes of Google, Twitter and Facebook have been among the early adopters, but others like Yahoo are also jumping onto the bandwagon. “From an advertising perspective, native or performance-based advertising needs no evangelism. We still need to see though how good the data profiling layer that Twitter has with MoPub is. There is anyway a supply crunch, so demand is not a problem,” said Sanglikar.
However, the addition of new ad exchanges only means that the digital space, especially for native advertising is becoming more fragmented, which might have unforeseen effects on the supply chain. AbhayDoshi, VP (Product Management & Marketing),Flytxt opines that the introduction of more ad exchanges has improved ROI only by reducing cost that’s not encouraging and the right direction for bridging the supply demand gap.
When asked for his opinion on how to rectify this demand/supply gap, Doshi said, “Supply has to be moderated by publishers adapting communication policy enforcement. The advertiser ROI has to also improve through either increasing audience engagement by superior targeting or reduction in cost per contact.”
According to Doshi, Twitter’s launch reconfirms three key trends in mobile advertising industry - the need for superior targeting ability, need for native advertising instead of banner on mobile for consumer engagement and need for single platform with superior reach instead of fragmented and manual process of buying.
“These are established trends and I just see this as their attempt to ride the trend. I don’t see any major change as this was very much expected especially from Twitter as their 70 to 80 per cent base is mobile,” he further added.
Programmatic buying or real-time bidding or performance-based advertising are all different names for a concept that allows advertisers to make the most effective use of their digital ads. Social networking websites like Facebook have been usually preferred by advertisers because of the level of hyper targeting that they offer and it seems that such platforms will play a big role in how the digital space shapes up in the future. The battle for the ownership of data and improving quality of insights has already seen a number of social media players, publishers, ad exchanges and, even, digital agencies, all aiming to own deeper subscriber insights and higher reach. To get an idea of how important data and insights are for advertisers, consider the case of Yahoo, which is usually considered a second or even third choice by many advertisers because of the limit of its data set (as compared to Google or Facebook).
Sanglikar agreed that social networks do add a better layer of insights, which improves profiling. However, he also pointed out that apart from the profiling the model is no different from others and the difference would only come if everyone had great profiling features. “Look at Facebook, performance-based advertising has been one of the main reasons for their success,” he said.
Doshi also opined that the “battle” might finally be won by the platform that is able to combine insights from social media, operators and other data suppliers. “There are questions on social media insights ability to identify subscriber purchase intents.”
Twitter’s reach is still not all encompassing when it comes to India, but, recently, the company has made it clear that growing in India is a top priority for them. We have seen a more aggressive approach towards building brand partnerships and portraying itself as a platform that provides meaningful insights on its users from the microblogging website over the last few months. Given this, it will be interesting to see what impact the MoPub platform has in India.