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To call native advertising a growing trend would be a understatement of epic proportions. Ads which impersonate the editorial content on a publisher’s site have become a full on epidemic. But while there are a number of arguments for why native ads are beneficial for both readers and the publishers, there is an utter dearth of technology solutions for creating them efficiently at scale.

Nativo is a three year old Long Beach, CA startup that aims to simplify this process for all parties involved. The company offers its publisher clients, of which there are 1,500 currently, an end-to-end native advertising platform that automates the formatting of sponsored content – aka, ”native ads” – to match their site design and layout. All that’s required is for the publisher to create a single sponsored post template and add a short code snippet to their site. The alternative is typically to manually reformat advertiser submitted content, something reeks of inefficiency.

For its advertisers clients – like Mazda, Ford, P&G, T-Mobile, Plantronics, and Symantec – Nativo operates like an ad-exchange, automating the customization and distribution of brand content. The platform also allows advertise to target ads to particular demographics, geographies, and other criteria.

Today, Nativo announced the addition of several new premium publisher partners, including The Street, USA Today Sports Media Group, Source Interlink Media, Kiplinger Washington Editors, Internet Brands, Entrepreneur Media, Investor Place Media, Reader’s Digest, and Sandusky Newspapers.

There are several key advantages for a publisher considering utilizing Nativo’s platform, according to The Street SVP of strategy and business development James Freiman. First and foremost, he says, is the fact that Nativo requires little to no involvement from a publisher’s technology team.

“We were in the process of rebuilding our [content management system] and had been approached by several other companies claiming to do what Nativo does, but all required heavy heavy lifting by my technology team,” Freiman says. “We have a laundry list of to do’s, development, and maintenance. We didn’t want to add anything additional to that list. Nativo was ‘do it once and walk away.’”

The second big differentiator is that Nativo served ads display properly across the desktop Web, as well as smartphones and tablets mobile browsers. The Street, for example, has seen mobile traffic rise from nine percent to 22 percent of its total audience over the last 12 months, but as with all publishers, has found it challenging to monetize these small screens. Per the definition of native advertising, text-based advertiser content is less interruptive to the reader experience than banners or other visual ad formats. And because these ads can be sold at premium prices, they can dramatically increase overall mobile monetization.

With high quality sponsored content from Blackrock or Oppenheimer – advertisers who Freiman characterizes as “best of breed” – The Street is able to command “double digit CPMs” (ad rates per 1,000 impressions) for its native ad placements.

“It’s about both profitability and adding more quality content alongside our existing quality content,” Freiman says. “It doesn’t work when the quality of an advertiser’s editorial does it match up, but when you get the right content it can be highly lucrative. Nativo just makes it easier to do it at scale.”

Nativo profits from both its software, sold on a SaaS basis, and through serving ads across its publisher network in a manner similar to Google-owned DoubleClick and other ad networks.

In April of this year, the approximately 30 person company announced a $3.5-million Series A round of funding led by Greycroft Partners, with participation from e.ventures, Signia Venture Partners, BDMI, and Mesa+. Previously, it raised $1.8 million from Signia and multiple angel investors. In June of this year, the company announced a partnership with Publicis Groupe-owned technology-focused agency VivaKi.

Native advertising is not all roses, however, no matter how the content is served. The Atlantic found out as much in January with a poorly-received campaign from Scientology and BuzzFeed has received similar heat for publishing (and promoting) an Anti-Planned Parenthood ‘listicle’ by Personhood USA – worst of all, the latter example was unpaid and instead published through BuzzFeed’s community network.

Advertisers that opt in to Nativo’s ad network-like service run the risk of seeing similarly controversial material published on their sites. While the company promises to match demographically and ideologically appropriate advertisers with publishers, allowing ads – in whatever format – to appear on your site without editor approval is a risky game to play.

But despite this risk, native advertising is growing in popularity among publishers and advertisers at a rapid clip. According to Nativo CEO Justin Choi, 75 percent of all Online Publishers Association member sites offer some form of native advertising today. That number is expected to climb to more than 90 percent by the end of 2014.

With this growth, comes the need for tools to efficiently match supply and demand among advertisers and publishers. Nativo has demonstrated that this requires more than just brokering placement. For native advertising to be effective the content must blend into the site on which it’s published. For companies to do so at scale, at least today, they need Nativo.

[Image via BBCIMG]

    1. Mark Patricof
      Past Investor
    2. Ed Cluss
      Past Investor
    3. MESA+
      Past Investor