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Why native advertising is a smart choice in the era of privacy

Two people stand in an office while giving a presentation.

From building brand awareness and amplifying content to driving leads, native advertising can provide a richer, more integrated advertising experience than standard ad placements. It also may take a more prominent role in programmatic advertising plans as new privacy regulations go into effect.

eMarketer estimates that roughly two-thirds of the U.S. programmatic display ad market—$53.42 billion—will be spent on native display ad placements this year.

While programmatic has benefited from its ability to reach audiences wherever they are, the sea of privacy changes, not to mention brand safety, is making brands reconsider how sustainable it is in the long term.

Privacy changes in the advertising industry

Advertisers and legislators are creating and adapting to increased regulations and legislation addressing consumer privacy concerns. While welcome and necessary for safeguarding privacy, these regulations stand to hamper the impact of some advertising targeting methods.

New policies build on the privacy-protective foundations of the European Union’s General Data Protection Regulation (GDPR), the California Consumer Privacy Act (CCPA), the California Privacy Rights Act (CPRA), and Brazil’s General Law for the Protection of Personal Data (LGPD). These include:

  • Apple’s App Tracking Transparency Framework.
  • Google’s phaseout of third-party cookies.
  • Country and state-level legislation such as the California Consumer Privacy Act, the California Privacy Rights Act, and the Virginia Consumer Data Protection Act.

How native programmatic could excel in a privacy-first world

The future of native programmatic relies on features becoming a vital way to reach audiences: first-party data coupled with AI and contextual targeting.

Many advertisers lean heavily on programmatic native advertising to bring automation, richer targeting, and scale to their ad buys. It works well because of the vast availability of signals, including third-party cookies. As advertising executives anticipate the declines in third-party data, many are pivoting to first-party data as the path forward. However, they must also ensure their first-party efforts are addressable and continue to scale and perform.

Let’s delve into contextual targeting, first-party data, and partners’ importance as advertisers begin expanding their programmatic native advertising efforts.

The importance and perils of contextual targeting

Research shows advertisers’ and publishers’ interest in moving toward more contextual-based advertising like programmatic native. Last year, 7 in 10 U.S. mobile advertisers surveyed in our annual mobile advertising report agreed that contextual targeting is making a comeback. New contextual targeting includes interest-based data from search and social or other owned and operated properties. It can also include external sources such as geolocation, weather information, and other behavioural data.

However, contextual targeting brings new concerns related to brand safety and suitability. Less reputable publishers may invest in content farms with variable degrees of quality and consumer experience as it gets traction. Brands need proactive efforts to avoid funding disinformation. It could become a complex landscape and scrutinise which supply partners advertisers choose.

Many brands may face a dilemma: Choosing between broad reach or quality. But they don’t always need to choose. One of the properties that Microsoft Audience Network ads may appear on is Microsoft Start. That channel reaches nearly half a billion people in 140 markets and 28 languages, spanning verticals such as Entertainment, Sports, Money, Lifestyle, Auto, and News.

Microsoft Advertising reaches over half a billion people worldwide. Bing alone has 500 million monthly users around the world and LinkedIn has 675 million global professionals. We’re the only partner with LinkedIn Profile Targeting on search and native.

Such data offers a richer context and gives advertisers a more comprehensive and cohesive view of the customer journey, which might be lost once privacy changes occur.

Partners offering access to—and measurement of—a variety of ad formats or channels are attractive for programmatic native advertisers who need to maintain performance.

First-party data and partners

In our Inaugural Identity Resolution report, we saw that 65% of U.S. advertisers planned to rely on ID graphs built on first-party data. They’re also spending more on driving traffic to their websites to capture that data.

These advertisers plan to obtain first-party data through rewards programs, coupons, content, and the like for customer information.

For brands, having their contact databases will be crucial for reaching their audiences from now on. But there’s only so much first-party data that brands can acquire. It’s essential to partner with the right publishers and platforms with data you can access—making it second-party data.

Data plus media partnerships

Having strategic partner relationships with first-party data-rich publishers is another path for programmatic native advertising to have a leg up on some other types. The natural publisher-direct relationships create more addressable advertising and enable scaled audience reach in a brand-safe, measurable way.

Native advertising isn’t something that brands can do on their own. Choosing the right partner is the most crucial consideration they’ll make to build advertising programs that will scale and perform in a privacy-compliant way into the future.

Advertisers need to vet partners for long-term privacy-compliant onboarding features and ask these questions:

  • Do they have a mechanism for anonymising ad requests? Microsoft uses Private and Anonymised Requests for Ads that Keep Efficacy and Enhance Transparency (PARAKEET).
  • How many contextual data points do they use? Microsoft Advertising audience intelligence uses billions of data points, combining signals from web browsing, search, Microsoft and LinkedIn data, to identify intent and apply AI.
  • How many platforms do they integrate? We have the data from Microsoft graphs such as MSN, Outlook.com, the Microsoft Edge browser, and partners like CBS Sports that allow rich audience understanding.

As you look to assess opportunities across these areas, keep the three S’s in mind: Is data secure, is the partner’s data safe to use, and is the data scalable?

Your partner should have platform-wide brand safety protection powered by Integral Ad Science (IAS). The IAS methodology never relies on single-source data to evaluate content—it weighs competing evidence sources. In addition to safety, ensure they also think about credibility. Microsoft Advertising uses the Newsguard trust rating across our network to distinguish between news and user-generated content.

What advertisers should do

There’s a lot that goes into programmatic native advertising to ensure it meets privacy requirements, which makes it a top choice for many advertisers today. Understanding the benefits and choosing the right partners will be critical to success.

Advertisers who create strong partnerships now can look forward to a more privacy-forward future for their brands and customers. That can mean positive changes in terms of audience and context, renewed measurement methods, and more robust ad performance.