Is This the Fate of Native Ads?

Native advertising, savior of the online publishing industry, could already be doomed. And if that’s the case, the disease that kills it may have been accidentally hatched in the very labs that were trying to fix its biggest weakness.

Let’s back up a bit. Native ads, traditionally described as advertising that matches the form and function of a website’s normal content, have enjoyed enormous growth over the past few years. And although they promise ad rates that can be four times greater than the much maligned banner ad, they have a major flaw: They don’t scale.

That’s why Justin Choi started Nativo, a company that offers publishers a way to sell native ads that match their content without employing people to manually distribute the ads. For example, a sponsored story promoting a car written up by an ad agency could be served automatically across multiple websites.

This could allow an advertiser to buy native ads across sites that had the same text but different headlines or labels and appear only in relevant sections. And they could do so without having to pay premiums to publishers to create them. Right now the company works with dozens of sites including Hearst Newspapers, Reader’s Digest and Newsweek.

In a recent conversation with The Information, Mr. Choi discussed the implications of his technology for publishers like BuzzFeed and its potential impact on online ad prices. Edited excerpts below.