While native ads can certainly be effective when implemented alongside editorial content, there are readers who find it can be difficult to distinguish between the two even though the FTC has guidelines in place that state that a company must indicate when a story is “promoted.”
Digiday reports that only 30 percent of publishers are in compliance with the new guidelines the FTC has put in place for native ads. Todd Krizelman, co-founder and CEO of tracking and ad analyzing company MediaRadar, revealed this statistic, along with the fact that 26 percent of websites run native ads without any sort of mention of the sponsor whatsoever.
With the new announcement of guidelines, changes are certainly coming. “The majority of publishers are actually going to be impacted by this announcement,” explained Krizelman.
Companies feel that these sort of ads are “less intrusive and more appealing” to consumers, according to The New York Times, but obviously the FTC has changed up the guidelines in the hopes of distinguishing that, yes, it’s still advertising that stands out from a site’s general content.
In general terms, the FTC states that advertisers “Should not use terms such as ‘Promoted’ or ‘Promoted Stories,’ which in this context are at best ambiguous and potentially could mislead consumers that advertising content is endorsed by a publisher site.” Jessica L. Rich, director of the FTC’s Bureau of Consumer Protection, stated, “People browsing the web, using social media or watching videos have a right to know if they’re seeing editorial content or an ad.”
Another ad firm, Nudge, recently analyzed 64 publishers’ native ads, and found that only a small handful utilize indication of advertisement. Its findings show that only 12.7 percent stated they were “sponsored,” while 9.5 percent use the term “presented by.” Lastly, 7.9 percent have the words “sponsor story” or “sponsored story” in use. Therefore, the new guidelines represent some much needed changes.
Considering that companies are looking to spend more money on native advertising this year (approximately two-thirds of marketers indicated they would be doing so), it appears that they’ll have to proceed with caution, making sure sponsored stories are marked as so.
Jeffrey Chester, executive director of the Center for Digital Democracy, a consumer protection agency, noted that “What’s needed is a 21st-century set of safeguards that enable consumers to control the data used to deliver them ads, especially formats like native that are specially designed to be disguised as content.”
That said, some are concerned that the guidelines, though not considered law, could be problematic when it comes to advancing the state of native advertising. “As soon as you start to standardize things and put guidelines around things, you limit the creativity and innovation that is able to occur,” said Mark Howard, chief revenue officer for Forbes Media. “If you put out stringent guidelines, are you going to put people back in the box “
Of course, let’s not forget that a number of consumers as of late have been picking up use of ad-blocking software, which reached a record high last year. With changes to native advertising, companies may have to be a little more creative to overcome this particular hurdle.
The FTC’s full guideline list can be found here.