Inside the evolution of native advertising

Jason Pollock
By Jason Pollock | 8 December 2022
Ayal Steiner; image supplied by Outbrain.

Native advertising has seen strong gains over the past decade and publishers, marketers and advertisers have all had to adapt in order to integrate the innovation into their plans.

One of the key players in this space has been Outbrain, the discovery and native advertising platform who have helped lead the market in adoption and understanding of native advertising, partnering with the likes of Nine, ACM and Pedestrian Group, among others in Australia.

AdNews spoke to Ayal Steiner, VP of global ad revenue (who helped to found Outbrain's office in Australia 10 years ago) and Andrew Burke, MD for APAC and growth markets, about the role personalisation plays for publishers, the digitisation of news and the impact that third-party cookie deprecation is set to have for advertisers. 

Steiner said that Outbrain didn’t begin life as a native advertising platform, but as a content marketing platform, with the Australian market responding positively to the proposition.

“That was the first time that brands thought outside the confines of an ad box, like a banner ad or a pre roll. 

“They figured out ‘I don't have to tell my story in 30 seconds, just because that's the TV cut; I can have a long form video instead’ or ‘I don't have to use an image with pixel-by-pixel definitions, I can now bring people to my own page and tell a much deeper story with multiple images and text.  

“Brands really were fascinated with that equation and there was a really good fit between what Outbrain had to offer, what publishers needed, what users wanted and the value brands got out of it.”

Steiner said that as time progressed, content marketing still remained a niche area and thus brands were hungry to evolve the play of open web advertising on a cost per click basis to acquire traffic to reach new customers.

“Not just for the sake of content marketing, but in a broader sense around products, customer education, landing pages, comparison pages, lead generation forms and more. 

“Through that, the term native advertising kind of emerged and took form as the way to run cost per click traffic acquisition/performance activities in the open web and outside of social and social platforms. 

“I think there's a wonderful synergy between our platform and the marketers or the publishers and how we kind of grow this space together. We can capture back marketing dollars that would normally go to platforms like Google and Facebook and really bring that to the open web ecosystem, and through that process, we’ve created millions of dollars of incremental revenue to publishers."

Steiner said that when Outbrain started partnering with news organisations, they would put a widget at the bottom of an article – essentially replacing the ‘most popular articles’ or ‘editors picks’ - transforming static or list-based placements into algorithm-based, data-fuelled intelligence.

“Phase one was those smarter boxes that powered engagement and a little bit of revenue. Phase two was releasing a smart feed, which was especially important when publishers started seeing a lot more of their traffic coming sideways through social platforms and discovery happening on Twitter and Facebook. 

Steiner said that with this evolution, the page itself needed to do two things it didn't need to do historically, when people navigated primarily in and out to stories via the homepage. 

“It needed to become a place that is a lot more personalised and fuelling discovery. Suddenly, you scroll through a page and then at the bottom of it, there's a whole feed of content, and also an opportunity to monetise that - that became increasingly significant. 

“The next phase is Keystone, which basically says, ‘we've been doing this, but you now want to do podcasts and subscriptions and affiliates and e-commerce, so how about we take the smartness in our feeds platform, the AI engine which knows how to optimise, and let's do this across the board in your homepage or in any other place?’. 

“Comparing to other markets where they're more risk averse, it's a very different DNA in Australia. I think that Australians are having a go, are very open and very innovation driven, so it's wonderful to like to work with a local publishing ecosystem and help them on their journey.”

Steiner said that with the proliferation of fake news, accounts, likes and comments on social media platforms, the accountability that digital news content has is something that advertisers are very interested in. 

“Digital news outlets are an extremely important pillar for advertisers. Advertisers are really keen to make sure that they support journalism, and not support hate speech, which can proliferate through Twitter or similar platforms where content is completely user generated.

“From an advertiser standpoint, it's really important that there's a strong digital news economy, but with ad innovation that can really make sure that they hit their goals."

Andrew Burke

Burke (pictured right) said: “I think that there's been an enormous response, particularly in the last few years, around people really deliberately seeking intelligent information; regardless of political agenda, people want trusted news sources. 

“That's a great compliment to the publisher economy where the effort is there, the journalism is there, the integrity is there, and that's what users are seeking.

“We're in partnership with that and we see our role at a macro level as just making sure that we can also contribute to that so that journalists can get paid, so the news business can continue and they can keep doing the great work that they're doing. 

Steiner said that the impact to publishers of the upcoming retirement of third-party cookies will go beyond just native advertising and affect the entire open web advertising ecosystem. 

“An immediate experience that we can look at is the rollout of regulation like GDPR in the EU, which kind of gives you a sense of what will happen.

“First of all, for any brands that are heavily invested in remarketing or retargeting, that is probably going to completely go away as a capability as it’s extremely cookie-based. With all the DMPS that basically fuel segments and micro segments into programmatic buying, that's going to make audience buying and targeting extremely hard and we'll probably gravitate back to relying on context. 

“That means if someone's reading an article about Formula One, for example, you could potentially classify them as sport lovers, car aficionados, that type of stuff. It's a broad generalisation, but it's not wrong, and I think there's also something to be said about having your ad appear in the right context as well.

“The end of third-party cookies impacts the creative process, it impacts the media process (how and where you buy media) and it impacts what you measure and what your definition of success is. That is all going to change, and I think personally in a much better direction. 

Steiner said that one of the most important trends currently influencing open web advertising is accountability, where brand managers, media buyers and CMOs are no longer comfortable measuring just on reach, but are seeking a deeper story and insights around engagement and concrete outcomes, such as users landing on the website and the time that they've invested to research the product.

“Native advertising through that lens is a much better vehicle than just displaying banner ads or pre rolls. 

“I don't know what we're going to call that in the future, but there's certainly going to be a convergence of native advertising and regular advertising, because I don't think that banners and pre rolls are a vehicle that would be satisfactory anymore in its current form, at least in terms of the level of accountability and engagement in real users touching the brand message and proof from data that there was a real impact on your advertising dollar. 

“I think there will be a lot more around creating experiences, and not just a ‘made you look’ type of ad; carousels, stories, vertical videos, and really getting creative with what we can do. 

“Ads that are for awareness, but also show you the product catalogue, so you can collapse the funnel between awareness and acquisition, will be key. I think there's a wonderful horizon of innovation that can converge native advertising and traditional open web advertising together.”

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