Welcome back to our Industry Exposed series! This time around, we sat down (again) with Ionut Ciobotaru, Managing Director and co-founder of PubNative, a mobile supply-side platform 100% focused on native adverting. Read along as Ionut shares some thoughts on the current situation of mobile native advertising, as well as where he thinks it's headed.
Ionut Ciobotaru (Co-founder & Managing Director of PubNative) started his career with a web development company and several technology related blogs. After years of entrepreneurial work in fields like eCommerce, digital marketing and collaborating with brands like Orange, Vodafone, HTC, Microsoft, Ionut sought a new challenge in the mobile space. He joined AppLift where he successfully developed company’s product suite for publishers and media partners. In order to fully focus on improving solutions for mobile publishers he founded PubNative, a mobile publisher platform fully focused on native advertising.
Can you briefly present PubNative and its business model?
PubNative is a global mobile SSP fully focused on native advertising. We work with direct mobile publishers to understand each app’s needs in terms of UX and business objectives in order to enable sustainable revenue growth. We aggregate a considerable amount of demand to create the right competition on the PubNative marketplace and deliver the highest eCPMs to our publishers. Our business model is a revenue share with publishers; depending on their size, publishers can receive up to 90% of the revenue that is generated through our platform.
What’s specific about mobile native advertising as compared to desktop native?
On mobile you have less screen estate and more restrictions on the user experience (UX). Therefore the most specific aspect of mobile native advertising is related to the ad units, which are much more custom on mobile compared to desktop.
On desktop you see a lot of sponsored content (provided by companies such as Taboola, Outbrain and Sharethrough) with the most popular native in-feed ads located at the bottom of the content.. Looking at social native advertising or the Facebook and Instagram formats for instance, mobile native seems to be more creative due to the limitations of the screen and the UX. For example, on desktop, most of the pages are rather similar: there is the header, the sidebar, the content area with the feed of articles. On mobile the experience differs depending on whether it’s a social app, a messaging app, a utility app, a gaming app, or a shopping app. Therefore, native advertising on mobile needs to adapt to these kind of categories while preserving the UX.
As one of the first entrants to mobile native advertising, how would you describe developments of the industry to date?
When we started in 2014, MoPub and InMobi were the only competitors in the mobile native advertising space. Both were either in stealth or in beta, so pretty much at the same stage. After we launched, we gradually saw increased activity in this industry.
The player that entered the market with the greatest impact was Facebook. Although Facebook is an ad network and not an SSP, as a platform it only runs native advertising (called social).
Due to the amount of data that Facebook possesses on mobile, they manage to deliver positive ROI for their advertisers, which helps them acquire sustainable budgets. Therefore, Facebook is not only creating the native advertising market, but also pushing it forward much faster than traditional, non-digital brands. These usually take more time to adopt new platforms (mobile) and new formats (native).
Also, Facebook expanded their technology to other publishers, which helped native advertising become one of the largest mobile advertising formats, second after the banner, or at least in the top three with banners and interstitials.
Other players in the industry include Google (who has a Beta), Yahoo (who has a very strong proposition) and many other small companies and startups trying to enter this market opportunity.
And how have formats changed?
At the beginning, formats were much more flexible. At least when we started, there were much more elements and more ways of creating ad units inside of publisher apps. But with time, we saw large adoption of native advertising on both the publisher and the advertiser side, and the inevitable questions surfaced: Is native scalable? And how can native scale considering all the customization available?
And all this customisation and the questions about scalability came to a compromise whereby you now have only five or six native elements that you can use in different variations. Advertisers are starting to understand that, instead of having just one asset for a banner or interstitial, they need to provide two or three types of text, title and description as well as several types of images. Publishers on their end realize that they need to display these elements in advertising formats that make sense.
Associations like the MMA and the IAB have been very supportive. The IAB released at least two papers documenting the format guidelines for native and the MMA published best practices on the effectiveness of native advertising on mobile.
Also, OpenRTB 2.2 and 2.3 were good steps forward in terms of technology. OpenRTB Version 2.3 has promoted increased levels of standardization in mobile native ads, so that advertisers can access a large pool of high-quality inventory through real-time bidding. It was however noticed that it’s still too flexible and too broadly described, which is why OpenRTB 2.4 should pick up where 2.3 left off. And actually, there will be a separate, specific version for the native spec 1.0 ( until now part of the Open RTB spec) in order to be able to move faster than for the Open RTB spec as a whole.
At first sight, programmatic, which aims to turn media buying into a commodity, and mobile native advertising, which is all about customization, seem to be at odds. How can they actually work together?
As mentioned before, by using a common set of creative elements and having a full set of assets, publishers can just pick the building blocks that will allow them to creatively build any kind of advertising format, or create any sort of advertising story. If you look at Facebook and Instagram, you see these five elements (title, description, rating, image being used very creatively to build advertising experiences that make sense. I would say that there is already a common understanding of that.
Also, we can see a move towards pairing the ad units with content specific to the category of the publisher social, messaging, utility, gaming, entertainment apps. It is another way to help advertisers not only know which creative elements are being used, but also where they are displayed and in which context. It’s basically about understanding what’s being shown, where, and to whom.
The new advancements in the programmatic space allow these native elements to be tracked very precisely. This creates a lot more common understanding of how the advertising is delivered, which in turn should help scale it as it provides more transparency on the advertising side.
What would be your main piece of advice for mobile advertisers when it comes to buying native formats through programmatic channels?
What we have noticed so far is that you really need to find the audience that fits your advertisement. As an advertiser, you really need to find the users that are most likely engage with your product. On Facebook this is really easy to do because you have a lot of data and can find those sets of audience pretty easily. On open exchanges (RTB), you need to experiment. In order to experiment, you need to try out different native ad units, publishers,exchanges, as well as different creatives.
It’s a new ground in terms of campaign management in the sense that you have five elements instead of one, so your process for setting up campaigns with creatives might be slightly different (but similar to what advertisers have been doing on FB already). You need to experiment a lot and find out where your target audience is. Then, start to optimize to increase engagement. Finally, scale.
For re-engagement on mobile, it also makes sense to check out mobile native channels, as
CTRs have proven to be much higher on mobile native formats compared to traditional ones.
What do you see as the main drivers of mobile native advertising in the future?
Publisher adoption seems to have taken off. We have seen major app developers like Tango or Cheetah Mobile (CleanMaster) use solely native advertising with great success. The next step in this story is having buyers ramp up budgets to test and understand how native inventory performs and how users engage with the ad units. Native advertising and real-time bidding integration is totally possible, and it’s poised to become the gold standard in mobile ads.
Native video will probably be the gateway format between what advertisers are used to buying already such as pre-roll interstitial videos, where the user engagement is a bit different but the impact is similar - and full native formats
As the MMA and IAB push native advertising, it will become better regulated, which will also help increase trust and adoption from marketers, users and publishers.The fact that it’s a sponsored message (the relevant disclosures are added) will benefit the whole mobile adtech ecosystem, from the advertiser to the user.
Thanks to Ionut for his time.