This week we were asked to discuss where we think advertising is going, specifically in reference to programmatic ad buying and “native advertising”.
What is programmatic ad buying?
It’s exactly what you’d guess. Programmatic advertising is simply where companies buy ad space through an automated system, much like buying stock instead of going through agencies or negotiations. Historically it’s been used primarily for buying space on smaller or unprofessional sites because it’s really the only way for them to get their fair share of business, but as time goes on, premium options are become more available. Sites offering premium space have always been reluctant to trust their revenue to automation since they like to maximize profit from each transaction by charging different organizations different amonts, but as they recognize the time they could be saving and the ad-buying trends, they’re becomeing more open to the idea. There’s nothing new in advertising methods to be found here, just how it’s purchased.
Overall this is a very, very good thing. As ad space becomes commoditized, pricing schedules will be more transparent and thus fair, inefficiencies and conflicts of interest will be eliminated causing reduced prices, and countless jobs will become unnecessary which will divert incredible amounts of manpower to (hopefully) more productive endeavors.
Where do I see this trend going? Further in its current direction. Just like stock trading I imagine a few dealers (equivalents of S&p 500) will rise to become the standards from which other companies (equivalents of eTrade) will help you buy ad space, and they will differentiate themselves based on assist servives and ease of use. I imagine ad space will be traded like much like options, and these brokerages will make their money by some quickly adding cents per transaction.
What is native advertising?
In traditional advertising there have been two polar opposite methods of execution with some grey area between them. On one hand (the type referenced above) you can buy space and say “Hey! You! This is our product we think you’ll like! Buy it!” On the other hand, you can type up information about your offering in such a way that it looks like news (called a press release) and try to get a publication to print it.
Native advertising is essentially the online equivalent of press releases, the shady side of advertising.
Just imagine yourself being a writer for a company using native advertising. You’re writing the content to make it look as much like news as possible, a headline so that it can be promoted and clicked on as if it were an objective article, and you’re trying to make the “sponsored by…” text as inconspicuous as you can. It’s leveraging the consumers’ trust for third parties (even worse, the press) to make them drop their filters and accept your inevitably skewed “information.” It’s true that people aren’t always misled by this tactic, but it only works when they are, and “public relations” professionals make their way in the world by perfecting this and related arts. No matter how you slice it this type of advertising is unethical.
(For some very funny and poignant examples of native advertising I take great pleasure in recommending this video.)
So where do I see this trend going? Nowhere until it’s illegal. And until big companies’ fingers are pulled out of the government and the government stops “dabbling” in the business of the press itself, I don’t see that happening.
And where do I think advertising will go in the future? Nowhere. It won’t move, it won’t shape-shift; it will be the same old beast with a different mask that likes to do things a little differently than he did before.