If mobile app developers in the early days focused mostly on winning new users to succeed internationally, rethinking kicked in by now, since intrusive mobile advertising is unacceptable nowadays! This paved the way for native ads, which possess the characteristics of being effective and at the same time less intrusive to users.
Impressive figures, such as from Facebook with engagement rate improvements of up to 60 percent and an increase in retention rates by three, suddenly made interest in native ads soar.
In fact, the limited screen space, usually a disadvantage of mobile devices, helped to enforce native advertising in the mobile sector: with so little room to place banners, ads must integrate perfectly into the predefined format that was previously occupied by editorial content.
Native ads show higher commitment rates in mobile than desktop-based applications, however, despite its increasing popularity, the rapid growth of the “programmatic mobile native ads” is still due, same as with other mobile ad formats, such as video or interstitial ads. Which poses the question why that is so and when programmatic can be expected on a larger scale.
Anyway, even if native ads are very effective, there is a catch: They must be placed in a conventional, non-programmatic way. To make a native ad truly "native", the ad should adapt to the format of the respective medium - and, of course, each platform presents its content in a different way. As a result, native advertising is a very time-consuming process that must be set up for every platform anew. At the same time, this has also led to the fact that channels with a particularly large range and strong targeting possibilities, such as Facebook and Twitter, already have occupied a huge part of the market. The constraint confined the growth of the native advertising industry enormously. For other formats, such as banners and interstitials, the programmatic media trade opened the market for a larger number of publishers and advertisers by making advertising more cost-effective and transparent in the mobile sector. Consequently, the next logical step is to offer and purchase native ads bookings programmatically, too - although mobile native ads still face two fundamental challenges:
So far, there are no uniform standard formats: The confusing number of mobile advertising competitors, as well as the various platforms, systems and advertisers, make it difficult to set uniform standards for various reasons. "Native" is a very broad term with different definitions – since most publishers have their own versions of native ads formats and therefore different views about how and if standard formats should be available.
Facebook and Google are hard to beat, with their enormous reach and advanced targeting opportunities. Hence the bulk of advertising budgets goes directly there. The dominance of Facebook makes it difficult for competitors to push into this market, as well as to create any kind of standards since the market is biased.
In summary, this mean that, while the standardization of mobile native advertising is only a matter of time, publishers still need to learn to market their audience outside of Facebook and Google. And although the Interactive Advertising Bureau (IAB) already published a "Native Advertising Playbook", it is unlikely that the market will experience significant changes that are broad enough to introduce general standards for native ads. Most likely, the native ad formats introduced by Facebook and Google will become the quasi-standard for native in-app ads, because of the dominance of the two in the market regarding app monetarization (on the offer side) and advertising spending (on the demand side). This leads to smaller vendors copying over and over again the format - which is already happening - both at the ad platform level and the app developer side. As soon as these standards are established, and publishers understand their audience, nothing is holding them back to embrace “mobile native programmatic”.