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Flite Co-Founder and President of Product and Technology Giles Goodwin authored a "Data-Driven Thinking" column for AdExchanger on the promise of native advertising, and how both media buyers and sellers will have to give up a bit more control in the process in order to achieve scale.

Native advertising has grown by leaps and bounds, but why hasn’t it knocked out the lowly banner? It has not reached scale, whereas banner advertising, whether direct or via RTB, enjoys almost limitless application and scope. Programmatic has only reduced friction and enhanced targeting. Native ads might be worth caring about, but the lack of scalability has rendered them a niche player.

Giles then goes on to explain the current native advertising exchange landscape, one that is attempting to build scale through a form of templatization. However, since the vast majority of publisher inventory lacks a common template, he argues that advertisers will have to cede some control over the ultimate format of native ads to the publishers they are buying media against.

In a native advertising programmatic setup, an ad’s content and formatting are decoupled. A bundle of content and its accompanying media can be associated with an advertiser’s media plan, and the matter of assembling a native ad unit left with the sell side. The publisher then digests the content bundle and media plan and automatically assembles an in-feed ad from it. Standardization occurs in the format of the content bundle and the individual publisher’s process for building ads from it.

Implicit is the assumption that publishers will also have to give up some control themselves. 

Programmatic means doing away with editorial review of incoming brand content. Rules for acceptable content need to be expanded, but there’s considerable variability within complied rules that might make publishers or their editors uneasy. Maybe that’s a bridge that publishers who’ve signed on for native have already crossed. What about others who’ve resisted? Unless they innovate a new advertising model that works better, they’ll have to capitulate, too.

Head over to AdExchanger to read the full column.