This Tech Platform Is Allowing Brands To Scale Native Advertising In A Big Way

Advertising on the internet is changing fast - and many would argue it's for the better.

The new trend is native advertising, or advertiser-sponsored articles (like this one!) that inform and engage with consumers. It's considered an effective, less invasive way to reach audiences than banners and pop-ups.

Native advertising is designed to fit in with the look and feel of whatever site you're on. But that's the trouble: If every ad gets customized for every site, how can advertisers make their work scalable? How can they know they're getting the best prices available? And what kinds of native ads are the most effective in the first place?

To dive deeper into the next phase of native advertising, BI Studios spoke with Lon Otremba, CEO of Bidtellect, the advertising industry's first open native ad exchange. Using Bidtellect, thousands of premium advertisers and publishers can now buy and sell native ads in real time. Otremba talked to us about how new technologies are revolutionizing native advertising's reach, and he offered some advice on what kind of native advertising works the best.

How did you get involved in digital advertising?

In the early '90s, I was associate publisher of PC Magazine, which at the time was the largest magazine of its kind in the technology sector. Two very sharp entrepreneurs, Halsey Minor and Shelby Bonnie, approached me with a business plan for a technology media company called CNET, based solely on digital media, and asked me to consider joining them. I was hooked from the start and joined as the founding EVP of sales in 1994. I have been in digital media ever since.

How did native advertising come about?

After billions of dollars of invested capital and countless hours of engineering, the industry hasn't been able to overcome the fact that consumers just don't engage with display ads. And consumers are showing a strong willingness to engage with native ads, particularly when compared with banner ads.

What's causing the native advertising field to boom now?

People like native ads. And importantly, they're now scalable. Our cofounder John Ferber also helped found Advertising.com, the display advertising industry's first exchange and yield-optimization technology company.

After Advertising.com was sold to AOL, John began to see a native advertising marketplace emerge. He recognized some distinct parallels with the display market, and realized that he could do for native advertising what Advertising.com did for display. So he built a sophisticated technology platform that enables advertisers and publishers to efficiently manage all aspects of native advertising.

What kind of challenges did Bidtellect face in developing its platform?

We had to build everything from the ground up, because none of this technology existed. Nothing existed to specifically enable provisioning, planning targeting, or running native ads across an open network of publishers. There also wasn't an openRTB exchange enabling access to native ad inventory. There wasn't any technology that allowed ad elements to be input once, then reassembled, in real time, on a publisher site - and look native to each page it was on. We also had to build programmatic connections from end to end to enable programmatic trading, and we had to build a complete optimization layer specific to native advertising.

One of the things we saw is that to get to the kick-open-the-doors scale point, some things had to be tackled. If you're a big brand and you're used to spending tens, if not hundreds of millions, of dollars on ad campaigns over the course of a year, having this cacophony of different platforms and approaches is very, very painful. So, one of the things that was an overriding driver of our technology and product development was to try to take as much of that pain out of it and build a sophisticated technology product that people could manage.

How does Bidtellect's native advertising platform work?

First, everyone gets a simple-to-use interface, specifically designed for the native advertising market. From the advertiser's side or "demand side," advertisers can come in and plan their native ad campaigns. They can upload elements and graphics. They can say where they want those campaigns to run, what their target demographics are, and what locations and device types they want to advertise on. There are dozens and dozens of different kinds of targeting criteria. The opposite side of that coin is the supply side. The publishers can set criteria on their side, too.

The third component brings both sides together in a real time-bidding environment. That's where an advertiser can be exposed to inventory sources that would be difficult to individually assemble. It can get more elaborate than that, of course: There's a lot of ways that supply makes its way into the exchange, and there's a lot of ways the demand side can access that supply.

How does an advertiser know that it's had a successful campaign?

Every advertiser has a unique way of looking at what's successful for them. Typically - and not to oversimplify - they fall into one of two buckets. One type of advertiser is looking for some kind of direct response metric, that is, some way of measuring clicks or conversions. That's one bucket.

The other kind of advertiser says, "I'm going to equate people engaging with my brand as value, and so the more they engage with my content, the more they engage with my brand." That kind of brand-oriented response is increasing. We created an engagement score based on some metrics that we plug in, and we'll create an algorithm.

Let's say you're an advertiser and your initial campaign engagement score comes out as a 7.2. Our technology can yield-optimize against it to start moving that score up. Our algorithm now has five components in it. A year from now, that may have 20 things in it. We actually have a patent application pending on the way we're doing it.

These are the words you should try to avoid in headlines: "easy," "how to," "credit," "watch," and positive superlatives like "best."

What kinds of words work best in headlines for native advertising?

Our partner Outbrain says these five words are the best for engagement (in descending order): "who," "hot," "surprise," negative superlatives like "never" and "worst," and "photo."

And these are the words you should try to avoid in headlines: "easy," "how to," "credit," "watch," and positive superlatives like "best."

What do you think the digital ad field will look like in 10 years?

As Yogi Berra once said, it's tough making predictions, especially about the future. I'll take a stab at it, though. I think consumers will continue to increasingly accept and engage with quality content, even if it's the product of advertisers. Moreover, the more consumers engage with native ads, the greater the incentive for advertisers to deliver quality content.

Learn more about native advertising and scalability at the Bidtellect website.

This post is sponsored by Bidtellect.

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