In a sense, there’s nothing really new about “native advertising.” Advertorials have been around in some form since modern periodicals first began appearing over a century ago. And now, with Facebook and Twitter inserting “promotions” that are sometimes hard to distinguish from regular user posts, more traditional publishers are giving thought to going beyond sponsored posts on blogs.
Into this space walks Tel Aviv, Israel-based CAST. The company has offered a CPC-based ad network for the past three years, and has been getting deeper into the native ad space with a platform designed to appeal to publishers dissatisfied with banner clicks and the perceived threat of programmatic buying. AdExchanger discussed the company’s approach with Omer Kaplan, co-founder & CEO, and David Cohen, VP Marketing, of the CAST native ad platform.
AdExchanger: “Native advertising” is hot right now. What’s the value of creating custom ads for publishers? Is there a challenge of attracting premium brand advertisers who want scale in addition to having a “unique” ad on a specific site network?
OMER KAPLAN: What we do first of all, when we approach a new partner we create different ad units to fit these specific sites. The way we work is we can use one set of creatives from the advertiser and then our technology would know how to customize the creative to fit the wide range of native units. That's how we can solve this scale issue.
DAVID COHEN: Just to add to that, basically the issue of native as we see it is about creating custom or what we call content integrated units. Whether it's an individual large website or a network of sites, we work with them hand-in-hand to create and design units that really fit the pages that they have on the sites that they have. We will help create the framework and set those frameworks up across all the different ad units throughout the individual publisher’s site.
Is there a way for native ad formats to meaningfully exist in a programmatic environment?
OK: I think the whole question about programmatic buying and what it's doing for direct sales of premium publishers is one of the issues that we're aiming to solve. Programmatic buying is very effective for the advertisers, but as most premium publishers will tell you, there are so many platforms on the way and until the advertising money actually goes to the publishers in programmatic buying, the premium publishers are becoming more and more reluctant to open their traffic through the exchanges.
With CAST as a native advertising solution, we believe we can significantly help premium publishers sell access to their content that would be much more interesting and relevant for direct advertisers. It’s an alternative to just buying simple display ads, which, as you know, continue to see declining clickthrough rates. We think that by offering this kind of platform, it will actually help the problem of premium publishers who are trying to sell more directly, as opposed to relying on programmatic. Ultimately, we see this as a new type of engaging real estate for their advertising.
Is there any real-time or dynamic quality to the ads that you run?
OK: We support yield optimization through reporting and use different types of matching algorithms that we developed whether it's contextual, behavioral, category based, depending on the type of site that we are working with.
DC: To add to what Omer said, we offer A/B testing, which any advertiser is used to. We're really focused on making it very easy for all sides involved, whether it's a publisher adding these units or an advertiser that now wants to bid on this traffic.
How do you manage those bids? Do you rely on outside parties as well? Does that defeat the purpose of boosting direct sales?
DC: We've built the entire platform ourselves from scratch. Everything that we do is based as advertising managed on our network, AfterDownload. We got to a certain point about a year-and-a-half ago where publisher clients asked us, “Listen, can we use your platform to power and sell inventory just for our site?”
What categories of publishers and marketers do you work with?
OK: Right now, the main category that we are focusing on is the software and tech-related content. We've already signed a few deals with new publishers from outside the software and tech and we are planning to expand to additional categories, and we’ll be announcing those shortly.
Is the company profitable? Do you have any acquisition targets or any funding plans?
OK: Our company has been profitable since its seventh month of operation and it has been expanding very quickly in the past three years. At the moment, there aren't concrete plans for raising a funding round.
What about international expansion plans? What’s the roadmap look like?
DC: Obviously the company is based and founded here in Tel Aviv but we have opened a San Francisco office. There is a natural expansion happening into the U.S. and we're looking out toward South America. We already have some strong partnerships there. Those are the three main areas. What's nice about Tel Aviv as a hub, it actually gives you access to both Europe and Asia without necessarily having to immediately open offices in those markets.
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