Native advertising is becoming increasingly utilized on mobile, but one common criticism still remains: publishers and advertisers have a tough time measuring its success, but the evidence for mobile native advertising exists. Approximately 22% of brands, agencies and publishers are not implementing native due to difficulty in knowing whether or not it’s working, and this is currently limiting the ad channel’s potential. But since studies show native as being generally more effective than traditional formats across the board, what’s really holding everyone back? As it turns out, measuring the effectiveness of mobile native advertising is probably much easier than you’ve been led to believe.

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The mobile web is an underrated part of the mobile economy. Despite the fact that SmartInsights reckons that the mobile web only captures 11% of mobile usage (in comparison to apps capturing 89%), Google’s insights into how users discover items for purchase shows that search powered by the mobile web out guns search in apps. more

Let’s face it: native advertising and programmatic buying don’t quite sound like they’d go well together. On the surface, their pairing appears to be a clash of qualitative vs. quantitative – of optimizing user experience vs. standardisation and scaling. But what many app publishers and brands aren’t realizing yet, is that native advertising and real-time bidding (RTB) integration is very possible, and it’s poised to become the gold standard in mobile ads. more

The smart watch market is a growing opportunity that mobile marketers and developers should be looking to tap and there’s great potential for smart watch ads. Although sales of the Apple Watch, the device expected to break the market open, have disappointed some analysts, it’s worth remembering that the watch is expected to have outsold all sales of its Android Wear rivals on the first day of launch – suggesting there is real room for growth in the wearable sector. more

Native advertising is proving itself to be one of the most effective, if not the best, way of engaging with consumers in an advertising context. And there are a number of reasons why mobile native beats desktop native advertising. The engaging and targeted framework it exists within ensures that native, as a whole, is primed to succeed for marketers and users alike.But not every form of native advertising is born equally.

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A little over a year ago, native advertising was still relatively new to most marketers and the future of mobile native was unknown to many. It was so new, in fact, that we felt it worthwhile to set out in a post what exactly we believed mobile native advertising to be as the terminology was still unclear enough to require clarification.

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When the term native advertising appears in the media, you can be almost certain that it refers to either a) in-feed ads in social media channels like Facebook and Twitter, or b) sponsored content and advertorials in news publications. While these are undoubtedly the most common forms of native advertising to date, mobile native advertising has emerged as a framework which can be applied to any app, mobile or online website.

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Two months into 2015, there is hardly any denying it: native advertising is poised to become one of the main mobile trends of the year. At PubNative, our conceptual vision is that native ads are much more than a trend: they are simply the future of mobile advertising. However, as with many things that get popular quickly, they are also greatly misunderstood. Today there is still a lot of confusion around the term, in large part  due to the fact that the concept of native was first established online.

Here are PubNative’s top 6 things publishers should keep in mind when getting to grips mobile native advertising.

 

1. Function Comes Before Form

 

The golden rule of native advertising is that it should not disrupt the user experience. Everything beyond that rule is detail. Said differently, native ads should always match the function of their publishing estate, whether it’s an app or a mobile website. Consequently, the ads need to take a form that fits that function. For instance, if the app’s function is to offer a feed of stories or status updates, the ad should take the form of a post in order to integrate seamlessly into the feed. Interacting with the sponsored post then has to offer an experience similar to a normal post. The function dictates the form.

 

2. It’s Not About the Format (per se)

The most common misconception about native advertising, especially on mobile, is that it is a new kind of ad format, just as the banner, the interstitial or the pre-roll video format. The truth is that, although native ads take the form of specific formats (paid search, in-feed ads, etc.), they are not a format as such. They are rather an advertising framework that can be applied to any app or mobile website, provided that the ad fits its function and preserves its user experience.

3. Users Come First. Always.

Once again, the golden rule of mobile native advertising: it should at no cost disrupt the user experience. Beyond making sure not to hinder the latter, native can even foster user engagement and enhance the whole app experience. For a successful mobile monetization strategy, make sure your native ad integration passes this test. Only offering a compelling and consistent experience to your users will set you on the path to efficient and profitable monetization.

4. Native Advertising is Not Sponsored Content

Just like Don Draper, native advertising is haunted by its past. In the general opinion, native ads are still very strongly associated to online search ads or sponsored content. In particular, the latter has a bad reputation, as it is often accused of being deceptive and blurring the lines between journalistic editorial content and advertising. True, much of native advertising online is sponsored content. However, this does not hold on mobile, as native ads are not competing with original content but merely opening up a new revenue stream for publishers. On top of this, accusations of deceptiveness can be easily thwarted by adding clear signs of disclosure.

5. True, Scale Is an Issue. But There’s a Cure.

No need to hide from the trough: the more customized native ads are, the more difficult it becomes to achieve real scale and trade them programmatically. Despite the rise of the OpenRTB 2.3 with the native extension, a large majority of programmatic demand does still not support native formats. However, using a native adaptor (such as the one PubNative offers), this hurdle can be overcome. The native adaptor will allow you to use standard ad components to build genuine native ad placements and offer them to be traded programmatically.

6. Let It Be Said: eCPM Is Not the Best Metric for Native Monetization

 

We’ve already written more in length about this specific topic, but it is important to understand that eCPM, although widely used as an industry metric, is not the best KPI to measure the efficiency of a native ad. There are mainly three reasons for this. First, the way eCPM is computed makes it directly dependent on the way the impression is measured. In the case of a banner, there is an IAB standard, but for a native ad, there are countless ways to define an impression. Then, networks can easily tweak eCPMs by capping fill rates, rendering the metric unreliable (at best). Finally, as a result of the earlier point, eCPM makes you lose focus on maximizing revenue as capping fill rates limits impressions, and therefore revenue potential.
Instead, a better way to assess your monetization efforts across all ad placements and apps is to use the Average Revenue Per User (ARPU).

Hopefully these pointers will have given you a head start in your mobile monetization strategy. What would you add? Let us know in the comments!

 

Welcome to the first in a series of insightful interviews about native advertising. Over the coming weeks and months we will be talking to industry executives and thought leaders about what’s working for them, the challenges they have faced and what’s in store for the future of native advertising.

Fernando-Vila-Sagnier-Quack-PubNative-native-advertisingKicking things off for us is Fernando Vilá Sagnier, Founder & Deputy CEO of Quack!, an instant messaging app. The app uses PubNative’s native advertising integration via an API, and we wanted to find out more about their decision to go native and their thoughts on native advertising as a whole.

Fernando has an impressive background in the finance industry, having also founded affliliate network app Gatwin and held the role of regional director at GE Money Bank and worked for Renault Credit Internacional and Nissan Finance. He gained an MBA at Esade and a Bachelor of Business Administration at University of South Carolina.

 

 

We hear Quack! has an interesting business model. Could you explain a little more about that?

Sure! Quack! is an Instant Messaging Service (IMS) on mobile, similar to many apps out there. However, we try and go further in our business model. Although we do monetize through ads, we differentiate ourselves in two major ways.
First of all, we believe that the user should always come first, and for this reason we only serve friendly and high-quality ads. Second, and most importantly, we have fully embraced what we believe is the third generation of IMS.

With the first generation, users would have to pay to use messaging services. The second generation then saw the rise of free messaging services, sponsored by ads and/or premium services. The third generation goes beyond this; with Quack!, we actually offer to pay our users for interacting with our app. We see this as the natural evolution of messaging services.

The payout is not incentivized per se, meaning it’s not directly linked to users interacting or even clicking on the ads. Users are actually paid based on sheer usage. For this purpose we have developed a proprietary algorithm that measures the activity of our users and remunerates them accordingly, by weighing the following factors in decreasing order of ponderation:

  • How many messages sent and received
  • How many group messages sent and received
  • How many people present on users’ contact list

What were your reasons for wanting to implement native advertising within your app?

From the beginning, we wanted to create the best experience possible for our users. It was not necessarily an obvious choice. With our business model, it would have been easy to take a direction involving ‘farming’ the users. We could be displaying a maximum amount of crappy ads to increase the yield, banking on the premise that, since users are getting paid to use the app and therefore are less likely to churn, we can show them just anything. Even though incentivizing the users can in some cases increase retention, we wanted to create an experience which would be enjoyable per se, in order to attract and retain quality users while fostering genuine engagement at the same time.

With Quack!, we made sure to combine a flawless user experience with a model that rewards the users for using and enjoying the app, and this is why we introduced native advertising.

Why do you think that native advertising is better than traditional banner ads?

For us it’s a no-brainer. Native advertising is the only type of advertising capable of monetizing an app while ensuring a smooth and pleasant user experience. If implemented the right way, that is, if you know when and where to show them, native ads can also enhance the user experience and advertising performance. We’ve indeed seen a significant uplift in CTRs, conversion rates and consequently eCPMs since we introduced them into our app.

What did you want to achieve by monetizing via native advertising?

We mostly wanted to try out something new! As mentioned, we mostly wanted to stick to our business model of rewarding our users while offering them a seamless user experience. And it paid off. For us, a better experience means happier users, which in turn means better and more frequent interactions of the users with the app, which down the line also means more revenue and profitability for us.

Are there any challenges that you experienced concerning native advertising?

The main challenge was to figure out the best possible integration of the ads within the app. It was not immediately obvious when or where to show them. In the end we realized that the smallest changes can have immense impacts on performance. It is paramount to A/B test and optimize the smallest details, such as the placement or the size of the call to action button. Iterating is the way forward.

How have your results been in terms of engagement, retention and monetization since you began showing native ads?

The performance of native ads compared to traditional advertising formats such as banners has been staggeringly high, as high as 3 or 4 times what it was before we introduced them. We’ve seen average eCPMs of above $3 and click-through rates beyond 5 percent.

What do you feel are the most important things for publishers to look for in an SSP if they want to begin monetizing with native advertising?

First, it is extremely important to work with a partner that really understands your app, its business model as well as what matters in terms of user experience.

Second, working with an API rather than an SDK has proven to be extremely valuable for us. It give us the flexibility to run multiple tests from our server. That’s not to mention that it doesn’t weigh anything, which is great for the advertising performance of the app itself.

Another important thing to bear in mind is that demand, and thereby the offers shown, is an integral part of the user experience. This means that you should never show an ad for an app that the user has already installed on their device. For this purpose, your SSP should allow you to detect the apps already present on a user’s device and blacklist offers for that specific user accordingly.

In your opinion, is native advertising a passing trend or here to stay?

Native ads are, simply put, the future of mobile advertising — there is no other way forward. No brand will ever want to advertise on mobile if the ads through which they are represented are intrusive, disruptive or low quality. Moving forward, native ads will enable mobile to get the attention and the budgets it deserves.

With close to 60% of digital ad buyers worldwide either running or planning to run mobile native ad campaigns, it is becoming increasingly clear that native is the future of advertising on mobile. In this mobile native advertising landscape infographic, we present the main players enabling native advertising on mobile today, all along the value chain from advertisers to users.
We divided the ecosystem in to several categories:

  • The largest publishers offering native inventory
  • The programmatic players: RTB-enabled DSPs, exchanges and SSPs
  • The networks: both mobile-focused and cross-platform
  • The social players: social platforms and PMDs
  • The search engines (search ads being native per se)

 

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