“Going Native” With Advertising?

SEMA News—December 2016


By Joe Dysart

“Going Native” With Advertising?

Watch Your Step, Advises the FTC

  Going Native With Advertising
The Federal Trade Commission (FTC) released new guidelines on native ads in December 2015.

While increasing numbers of companies are moving to “native advertising” (advertising that is woven into the very fabric of content produced by publishers), the Federal Trade Commission (FTC) has warned, “Watch your step.” Disturbed by the growing number of ads that are indistinguishable from news, radio commentary, entertainment video and other content, the agency released new rules this past December designed to reign in firms and ad agencies that are taking too free a hand in drawing the line between advertising and content.

“People browsing the web, using social media or watching videos have a right to know if they’re seeing editorial content or an ad,” said Jessica Rich, FTC Bureau of Consumer Protection director.

A major impetus behind the FTC’s latest move is that the flow of native advertising into popular media has become a torrent. Indeed, according to an April 2016 report released by market researcher IHS Technology (www.ihs.com), native advertising in smartphone and other apps alone will generate 63.2% of all mobile display advertising revenue by 2020—or $54.4 billion.

“Native advertising is booming, and today’s most successful mobile marketers have already made the switch,” said Eleni Marouli, principle analyst at IHS Technology and coauthor of the report. “The future of mobile advertising is native,” she said.

Tod Sacerdoti, vice president for display and video ads at Yahoo, agreed with that assessment.

“The prevalence of native ads has skyrocketed, and advertisers and publishers alike are taking notice of its increasing potential,” he said.

Probably one of the more famous examples of native advertising—which for decades has been called “advertorial”—was a news feature on women and prisons published by The New York Times (http://tinyurl.com/paidpost-netflixwomen). While the story had the look and feel of Times journalism, a tiny notation at the top of the piece advised the reader that the article was actually a “paid post” sponsored by Netflix to help promote its hit show “Orange Is the New Black.”

Not surprisingly, other major media companies are also courting lovers of native. For example, Conde Nast (www.condenast.com), which publishes Vogue, Wired, Ars Technica and other popular titles, has jumped in with both feet to craft native ads for its sponsors. In a bold offer to advertisers, the media giant offers up its magazine editors, writers, photographers and other journalism creatives to the service of all things native.

“We are changing the branded-content game with ‘23 Stories x Condé Nast’ by offering marketers, for the first time, access to our unparalleled editorial assets,” said Edward Menicheschi, Conde Nast’s chief marketing officer. “As clients seek to elevate their storytelling and define themselves as publishers, we believe Condé Nast is uniquely qualified to partner with them to deliver compelling content, targeted to the right audiences at scale.”

Adds Shannon Lynch, marketing coordinator at Native Ads—an appropriately named company specializing in native advertising (www.nativeads.com): “Media brands are jumping on the bandwagon to take advantage of the opportunities it offers.”

While the opportunity to blend advertising with news media and similar content is tempting, below are some best practices you should follow, based on the December guidelines released by the FTC.

Be Real: Overall, the FTC guidelines say that if your company deliberately tries to hoodwink people into believing that your “native advertising” is really news or other content, you’re going to be considered in violation of the law. So before you run your native ad, look at it soberly: Is it clear to the everyday person that you’re advertising to them?

“Consumers don’t want to feel bamboozled, hoodwinked, gulled, tricked or suckered by publishers or the brands pushing their content,” said Scott Guthrie, digital director for influencer relations at public-relations firm Ketchum London (www.ketchum.com/london). “When producing native advertising, media companies must make sure it is clear that it is native advertising. Consumers appreciate it. Regulators demand it.”

Disclose Clearly: Be sure you have a clear and prominent disclosure that your “native ad” is advertising, no matter what content you’re using.

Consider the Overall Impression Made by All Elements of Your Native Ad: The overall impression communicated by your ad—including the use of text, images, sound, video and the like—will be the basis upon which the FTC rules whether your native ad will be considered legal or illegal.

Be Careful About Mimicking News Formats: Back in the old days, “native advertising” was more commonly referred to as “advertorials,” which were generally sponsored news stories touting a firm and were made to look and read like a news story. If you’re going to mimic news formats in this way, you need to be doubly sure you’re disclosing that your content is actually an ad.

Don’t Use a “Deceptive Door Opener”: Some advertisers on the web use a headline, thumbnail image and short text description, written in a newsy format, to entice a reader to click through to their native ads or even traditional ads. This is an illegal practice, according to the FTC, since the initial newsy formatted “bait” looks like exactly like editorial content.

Don’t Isolate Legal Disclaimers: Simply having a publisher disclose that some of the content on its site—including its native advertising content—is native advertising won’t work. Essentially, any native advertising you’re doing must be clearly tagged as such.

Don’t Do “Product Placements” in Editorial: For example, a native-advertising article on an emerging industry trend that “happens” to include a paid mention of your company’s service or product must be clearly tagged as native advertising.

Don’t Pass Off Infographics That Tout Your Company as “News”: Publishers paid to use an infographic that promotes your company in some way must disclose to readers that your infographic is, in fact, native advertising.

Be Careful About Repurposing Editorial as Advertising: If a print, radio, TV or web news outlet gives your company a glowing review, be sure the review is entirely accurate before you republish it on your website or elsewhere.

Check Out the FTC’s Business Guidance on Native Advertising (www.ftc.gov/tips-advice/business-center/guidance/native-advertising-guid...): Unlike some government guidance documents, this one is written in plain, engaging prose that is easy to grasp. By the time you or your legal staff finishes this guidance, your company will have a much better idea of how to steer clear of an FTC violation.

Have Your Attorney Check Out the FTC’s Enforcement Policy on Native Ads (http://tinyurl.com/tc-gov-deceptiveenforcement): Here, you’ll find the more detailed legalese on the FTC’s new native-ads policy.

“Treated honestly, ethically and delivered with high quality, native marketing can be good news for the brand, the media outlet and consumer alike,” said Guthrie.

Joe Dysart is an internet speaker and business consultant based in Manhattan.
646-233-4089 | joe@joedysart.com | www.joedysart.com

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