abvertising“Native advertising” was the digital advertising buzzword of 2012, and with good reason: It was a fantastic year for these types of ads. Major platforms Facebook and Twitter made significant advances in mobile native ad models, generating more than $1 billion combined from Sponsored Stories and Promoted Tweets on mobile devices. Venerable publications like Business Insider and Forbes introduced new sponsored content programs. Advertising technology companies like Outbrain continued to develop products to help scale the market.  And substantive original research was conducted by BIA/Kelsey and Forbes Insights.

While being a buzzword is not all bad, the spiraling amount of conversations can cause us to miss the forest for the trees. There are still some critical steps the industry needs to take to move native ads from yesterday’s buzzword to tomorrow’s new media category.

Here are 10 things that will help the category evolve:

1. Agreeing on a broad definition of “native advertising.” 

In our view, native advertising should be broadly defined as ad strategies that allow brands to promote and weave their custom content into the endemic experience of a website or app. These native ad experiences differ from traditional digital ad formats such as display and pre-roll because they are choice-based placements (ie. non-interruptive) that are well integrated into the visual design and content feel of a publisher’s site. These ads are not only sponsored posts or advertorials, but also any type of content that fits within this general definition.

2. Growth of publishers and platforms that generate meaningful revenue from native ads. 

Large publishers like The Atlantic, Gawker, and Forbes are already committing to native, and local newspapers around the country are revamping their designs to help integrate additional native units. Just take a look at the revamped San Diego Union-Tribune.  2013 needs to see a vastly increased pool of publishers that are incorporating native ads, which will add much greater scale to available inventory as well as new revenue streams for publishers.  Keep a close eye on major publishers like Tumblr, Gannet, Hearst, Time, and Conde Nast to continue investing in native ad models.

3. Advertiser investment in the creation of engaging branded content. 

Leaders in this category currently include companies such as RedBull, Intel, Old Spice, but the list is continuing to grow. From branded video to thoughtful sponsored posts, content marketing is now a much larger part of company marketing budgets and is essential if publishers are going to open up more native media options. Quality brand content fuels the success of native ads.

4. Media agencies’ inclusion of native advertising as a separate and equal media strategy to display, search, and video. 

Display, search and video have all progressed to become must-buys for advertisers. Within this list, display is most likely to see some its budgets be re-directed towards native ads, but ultimately native ads are going to need to carve out their own category. This will likely go hand in hand with the increase of original branded content that will be created in the future.  We’re already starting to see dedicated “native ad” RFP’s, and expect this trend to continue.

5. Expansion of native advertising programs to all creative mediums.

While some brands are currently testing the waters in one native category or another, we are interested in watching how brands diversify their native advertising footprint. From freshly curated sponsored playlists on Rdio or Spotify to promoted listings on apps like Epicurious, there are several categories where there is opportunity for substantial brand adoption.

6. Improvement and creation of mobile-first native ad solutions.

Companies such as Pulse and Path, who are pioneering great mobile products, are also helping to define what mobile native advertising can be. It’s essential that great mobile companies, such as Foursquare, commit themselves to creating novel native ad products, rather than settling for the pesky mobile display and interstitial units that we commonly see these days.

7. Growth of central buying platforms that can provide access to native ad placements across multiple platforms and formats.

Similar to real-time bidding (RTB) for display ads, a native buying platform should help to increase the scalability of native units. Like Adaptly, there are several Demand Side Platforms (DSPs) already integrating social into their services. In addition, Facebook’s Sponsored Stories are also being bought programmatically.

8. Ads becoming treated as stories; content being used in ads.

We are a culture of headline scanners and power browsers, especially when it comes to mobile devices. In response, native ad units need to be treated as a primary content unit, not just the front door.

An example of this trend is Linkedin, where your job postings are the content.  Custom descriptions and headlines within native ad units will become nearly as important as the content behind them, and we anticipate that this trend will lead to the growth of custom content and headline teams within brands and agencies.

9. Validation that native ads perform for brands and agencies.

While we’ll continue to see varied reports on average clickthrough rates for native ads on the major social platforms, we expect to see deeper studies on meaningful brand and business metrics. Facebook’s exploration into View Tags is an interesting example and one that could prove to be more consequential as they focus in on mobile specific research.

10. Simplicity and “standardization” of native ad formats to streamline publisher implementation, and a process for advertisers to buy, track data, and evaluate success.

While native ads connote visual experiences that are customized to fit their surrounding environment, some level of standardization is needed to reach scale. Standardization though doesn’t have to mean one-size-fits-all visual experiences. Pre-roll is IAB-standardized to VAST, even though it can have all sorts of sizes, formats, and interactions. Standardization for native will be similar in spirit: it’s the format, the tracking and the metadata, not the size and shape.

[Illustration by Hallie Bateman]