native ads: why companies prefer building in-house versus partnering
TRANSCRIPT
BUILDING NATIVE ADS WHY COMPANIES PREFER IN-HOUSE PLATFORMS OVER PARTNERING WITH NETWORKS
TL;DR
SOUND FAMILIAR?
“I need revenue, but would never show annoying ads. I like native ads, but how do I integrate them into my website and app?”
LET’S GO!
Read on to learn:
• When you should and shouldn’t work with a native ad network
• Why building your own platform is always a better long-term decision
• Tools for making it easy to build an integrated native ad platform in-house
WHY NATIVE? BETTER UX
LEGACY ADS
This is a terrible, ad-ridden experience...
INTEGRATED NATIVE
Ads are unobtrusive and relevant to surrounding content, adding value.
Legacy Ad Native Ad
WHY NATIVE? REVENUE
Native ads account for 60%+ of the ad revenue for LinkedIn, Facebook, Twitter, Pinterest, and others…
$35 B
$70 B
2012 2013 2014 2015
Facebook revenue (billions)
Facebook released mobile native ad unit
v
NATIVE AD EXAMPLES
IN-FEED PROMOTED POST SPONSORED LISTING
v
NATIVE AD EXAMPLES
IN-FEEDPROMOTED POST SPONSORED LISTING
v
NATIVE AD EXAMPLES
IN-FEED PROMOTED POST SPONSORED LISTING
INTEGRATING NATIVE ADS
BUILD IN-HOUSE
Like Facebook, Trulia, Linkedin, Quora, Imgur, Reddit, Expedia, Pinterest, Twitter, Yahoo, Yelp, Amazon, & Foursquare…
OR, PARTNER WITH A NATIVE NETWORK
Like Native Ads, TripleLift, Taboola, Outbrain, AppNexus, Mopub, DoubleClick, Sharethrough, & Facebook Audience Network…
PARTNERING WITH A NATIVE AD NETWORK
NETWORK NATIVE AD EXAMPLES
IN-STREAMRECOMMENDATIONS MOBILE IN-FEED
NETWORK NATIVE AD EXAMPLES
IN-STREAMRECOMMENDATIONS MOBILE IN-FEED
NETWORK NATIVE AD EXAMPLES
IN-STREAMRECOMMENDATIONS MOBILE IN-FEED
PROS: DEMAND / SPEED
SPEED
Launch in hours with drag-and-drop JavaScript Widgets.
DEMAND
Networks provide paying advertisers immediately - no need for direct sales teams.
CONS: NEVER TRULY NATIVE
Doesn’t blend in well
Obtrusive formatting
Irrelevant to search
Doesn’t look like organic content
Blurry image; no quality control
$2.00
$4.00
$6.00
$8.00
$10.00
Recommendation Widget Traditional Display Native Display In-House Native Platforms
CONS: LOW CPM
Average CPM ranges
$0.35 - $1.00 $0.25 - $1.50 $0.50 - $2.00 $5.00 - $10+
CONS: BRAND ISSUES / MALWARE RISK
MALWARE
JavaScript tags can be hacked and exploited.
BRANDING
Publishers don’t have 100% control over who is advertising.
CONS: SLOW LOAD / AD BLOCKING
BLOCKED
Susceptible to ad blockers and lost revenue.
SLOW
JavaScript tags increase load times, leading to page abandonment.
12.5%
25%
37.5%
50%
1 2 3 4 5 6 7 8 9 10
Abandonment rate by load time (seconds) - Kissmetrics
$13 B
$25 B
$38 B
$50 B
2013 2014 2015 2016
Global economic cost of blocking ads - PageFair & Adobe
BUILDING AN IN-HOUSE INTEGRATED NATIVE AD PLATFORM
INTEGRATED NATIVE AD EXAMPLES
SPONSORED PROFILESTINDER
PROMOTED POSTSINSTAGRAM
SPONSORED INGREDIENTSALL RECIPES
INTEGRATED NATIVE AD EXAMPLES: INTERNAL PRODUCT RECOMMENDATIONS
PROS: 100% NATIVE Search-based and highly relevant
Advertisers love eye-catching logos
Offers same interaction features
Ad image, font, and layout blends in with organic content
PROS: BETTER USER EXPERIENCE
Curated post sponsored by eBay
One of many comments praising the ad
Article provides fun and engaging content
User can like, share, and up/down vote the ad
PROS: FOR MARKETPLACES, GREAT FOR SELLERS & BUYERS
Sponsored listing programs let sellers pay to have their products promoted
Buyers see ads that relate to search terms or page content
PROS: MUCH HIGHER CPM
$20
$40
$60
$80
Native A
d Netw
orks
Insta
gram
Twitt
er
Face
book
Trip
Advisor
Foursq
uareHulu
Pinter
est
Snapch
at
eCPM ranges of in-housenative ad platforms
PROS: BRAND SAFETY / SECURITY
MALWARE SECURITY
Ad platform operates without hackable 3rd party JavaScript tags.
BRAND SAFETY
Complete control over who advertises to ensure brand-safe ads.
PROS: FAST LOAD / AD BLOCKER PROTECTION
AD BLOCKER PROTECTION
Integrated native ads are hard for ad blockers to identify.
FASTER LOAD TIMES
Improves user experience to have faster page loads.
6 Months 12 Months 18 Months
CONS: TIME-TO-MARKET / ENGINEERING RESOURCES
Could take years to build platform (plus the opportunity cost of not focusing on core product)
Months to build in-house
10 Engineers
5 Engineers
1 Full-Time Engineer
CONS: SALES OVERHEAD
6
12
18
24
30Estimated number of new hires
by yearly ad revenue
$10M $20M $50M $100M
Direct selling earns higher CPMs, but incurs cost of sales and ads op teams
$1,500,000
$3,000,000
$4,500,000
$6,000,000
10M 25M 100M
Network Direct
DIRECT SELLING EARNS MORE LONG-TERM
Estimated yearly revenue after removing extra salaries
Monthly Impressions
Inputs - Network CPM: $1.50 / Direct Sold CPM: $5 / Avg Salary: $100,000
ABOUT ADZERK
Adzerk is a cloud API platform for building in-house native ads in weeks, not years.
ABOUT ADZERK
EASILY BUILD NATIVE ADS WITH A SUITE OF API TOOLS
NATIVE AD DESIGN Build any type of ad, anywhere, on any platform.
TARGETING TOOLS Search, content, location, behavior, & more…
AD DECISION ENGINE Chooses the right ad to show (based on rules you define) within 100-300ms
CUSTOM TRACKING Track custom events like shares, likes, up/down votes & more…
Your ad platform Adzerk
JSON Request
Returns to your CMS
BUILD A NATIVE AD PLATFORM IN WEEKS, NOT YEARS
Number of months to build ad platform
20 40 60
From scratch On top of Adzerk
3 Engineers
1 engineer can build an in-house native ad platform in just 6 weeks
1 Full-Time Engineer
ADDITIONAL BENEFITS
SERVER COST SAVINGS outsource billions of ad decisions
ENGINEERING SAVINGS no need to hire new engineers
FAIR COSTS <1% of total ad revenue
SECURE server-to-server is faster and safer than JavaScript
SCALABLE Adzerk does 1B+ impressions a day with room to scale
RELIABLE 99.99% up-time
TRUSTED BY USER-FIRST SITES + APPS
“Adzerk's APIs allowed us to avoid having to build ad delivery logic that wasn't available in-house.”
— Jena Donlin, Sr Product Manager, Reddit
LEARN MORE
ADZERK
Adzerk is a cloud API platform for building integrated native ads in weeks, not years. Reach out to adzerk.com/contact for more info.
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