What’s So Native About Native Advertising, Asks the FTC

Late last year the U.S. Federal Trade Commission (FTC) for the first time poked its nose into the business of native advertising. The regulators issued a statement of guidelines that basically said native advertising, sponsored content, or whatever else you want to call it, needs to be clearly marked as such.

FTC badgeIf you are not familiar with the term, native advertising is a modern iteration of what used to be called “advertorial.” The idea is to create content that appears to be “native” to the publication in which it is embedded. So instead of seeing an obviously paid display ad, the advertising content may be delivered as part of a menu of headlines substantially similar to any of the headlines of stories that the publisher’s staff may have written. There are in fact publishers who offer up staff writers to advertisers to make their content look even more “native.”

It is a rather clever solution to two problematic trends in the digital publishing business world.

One is the exposure of traditional advertising as being fairly useless. When publishing moved to a digital format and when we developed the ability to track and measure what readers clicked on, we found that the click rate for the predominate form of online advertising, display, could only be measured in multiples of zero.

For publishers, who are already seeing their print advertising business shrivel, the inability to deliver an effective advertising product online leaves them thinking that the traditional Chinese wall between editorial and advertising might not be as important as survival.

Native advertising is intended to address these two issues. And I think it is pretty clear that the way in which it addresses these issues is by creating a form of advertising that the reader doesn’t really think is advertising. The FTC is likely thinking along the same lines when they comment: “The more a native ad is similar in format and topic to content on the publisher’s site, the more likely that a disclosure will be necessary to prevent deception.”

Advertising industry groups and agencies publically say they support efforts to identify ad content as such. But I’ve heard from more than one publisher who was offered a pretty good payday to place some native ad content without any identifying tags. And that was from the publishers who turned the offer down.  Those who accept it are keeping mum. (Harkens back to the day when a news release would arrive in the newsroom with a $20 bill in the envelope.)

Like most people, I don’t ever really choose to view, read or see ads unless it’s something I go looking for myself. I use ad blockers on my phone and when I go through menus of news headlines if I see something tagged as an ad, no matter how gingerly it is stated (e.g. partner content), I usually click away. So for native advertising to get through to me, you pretty much have to trick me into thinking it’s not what it is.

Some time ago I was involved with a company that created and distributed video news releases (VNRs). As they were originally conceived, VNR’s sounded innocent enough, just like news releases but in video form.  And the makers of VNRs suggested that they were packaged into stories to show the context, much as news releases were written like news articles (by those PR people smart enough to do so).

But the whole gig blew up thanks to usage of the VNR format by the Bush Administration. They put out some VNRs for Health and Human Services in which a paid employee of the PR firm posed as a reporter interviewing HHS execs. When some stations used these VNRs and presented them as news stories they were called out and another regulatory body, the Federal Communications Commission (FCC) got involved.  The FCC made some noise about regulating “fake news” and actually levied a couple fines for VNR usage. The Comcast Network was fined twice for using VNRs as if they were news. Not long thereafter, the VNR pretty much disappeared.

That is a useful lesson is disruption. Not all the disruptors are in Silicon Valley. Some are in Washington. And those are the ones that carry the biggest sticks.

I don’t expect native advertising to disappear as quickly as the VNR did, although it could also fall in to the “fake news” category. Its survival depends on a level of transparency that is the only way to keep the regulators at bay. And if they are going to be upfront about it, the advertising world needs to find a way to actually produce content that some audience really wants to see and read.

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16 Responses to What’s So Native About Native Advertising, Asks the FTC

  1. Donna Janke says:

    It will be interesting to see what the future holds for native advertising. I’m glad there are regulations about disclosure, but that doesn’t necessarily mean everyone will follow the rules. Perhaps it will lead to people becoming more critical or skeptical about what they read in print or online.

    Liked by 1 person

  2. And so I learn more interesting things about how I’m deceived without realizing it! With a DVR on hand, my TV commercial intake is thankfully low. Ad blockers on the computer and ignoring as many of them in Facebook helps keep me sane. But a magazine…there are times I’m happily reading along and suddenly think: What is this? There at the top of the page is the note “paid advertising” giving me the clue that I can stop reading. I just hate getting faked out during my precious reading time!

    Liked by 1 person

  3. Erica says:

    I love how companies are now paying for product placement in movies and television shows. Many companies don’t even need ads anymore. They just pay for product placement and they reach us at a time when we can’t look away. Companies are getting sneakier and sneakier at making sponsored stories look real. I usually don’t click on them anymore, but I always become irritated when a news story turns out to really be an ad.

    Like

  4. lenie5860 says:

    Magazines, including Reader’s Digest, often have a page of advertising that looks like an information page. It’s only after you start reading that you realize it’s paid content. This has been going on your years and it is interesting that now, when digital has stepped to the fore, that something is being done about it.

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  5. I’m curious to see what happens with the online advertising “stories” that come about from these new regulations. I have in the past read an article online and in a magazine and then realized that it was an advertisement. Oh well. I would prefer if they made the font a little bigger when it comes to the notice to help the reader realize where the content is coming from and save the reader’s time when looking for legitimate references. I don’t think it will happen, but it would be nice. Thanks for sharing this great post.

    Liked by 1 person

  6. Have to say that I don’t like the term native advertising. Much prefer advertorial because it’s straight to the point. Such content should be clearly marked to show that it is an advertisement. The reason there is a discussion about it is because newspapers need the money they get from advertorials to survive.

    Liked by 1 person

  7. Meredith says:

    Ken, this is of particular interest to me as I’ve recently started occasionally publishing product reviews on my blog. As a publisher, it’s a very fine line to walk between being completely unbiased and transparent, and sharing useful content with my readers, even if that content is paid. I’m very picky about what sponsored posts I write, and my disclosures as such, but it’s still a tricky problem, as advertising is always in a state of evolution and I always want to be on the side of the writers/readers, and not the advertisers, although they do pay some of my bills.

    Liked by 1 person

  8. Phoenicia says:

    I have been caught out by “fake news” a number of times! I have opted out on realising.

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  9. BroadBlogs says:

    If I understand the definition, native advertising can be dangerous. Like when pharmaceutical companies place ads in medical journals that looks like journal articles, And doctors take the advice. Scary stuff.

    Liked by 1 person

  10. I’m not against such ads per se, though as a former educator I do advocate for the need to deepen the level of digital literacy skills imposed upon students so they can more readily identify such types of text.

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  11. heraldmarty says:

    I agree it’s going to be interesting to see how this evolves. I have noticed sites that I follow becoming more transparent about NA and a couple have even begun listing them in stand alone sections in the sidebar of their sites under “sponsored”.

    Like

  12. Andy says:

    I’m not so sure that native advertising is anything to lose sleep over. All publishers have one or more agendas: no one is 100% objective. Every ad, native or otherwise, is ultimately an ‘editorial’ of sorts. At some point, every advertiser wants you to reach for your wallet: you have the freedom to say STOP when that happens.

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  13. Interesting post. It is interesting how advertisers constantly try to make there advertisements not look like advertisements.
    I am wondering if there are regulations placed on the native advertisements, what will they come up with next?

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  14. I think native advertising is very deceptive most of the time. It should have been regulated a long time ago. Glad something is finally happening with this.

    Liked by 1 person

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