With online advertising revenue plummeting, publication companies are scrambling to recover by implementing innovative selling propositions to attract advertisers.
Business Insider Intelligence estimates by 2021, native display ad revenue in the US will make up 74 percent of total US display ad revenue, an 18 percent hike from its share in 2016.
Native advertising is material published in an online publication that resembles the publication’s editorial content, but is paid for by an advertiser and intended to promote the advertiser’s product. By matching the visual design and nature of content, a native ad often blends seamlessly into legitimate content.
This unclear distinction between types of content presents a unique challenge to consumers. They must be able to identify what is paid for and what is real, a skill most consumers lack. Still, consumers aren’t to blame; publishers who present misleading content to the public should be held accountable.
Sharethrough, the world’s largest in-feed ad exchange company, found consumers looked at native ads 52 percent more frequently than banner ads. This expansion influences advertisers to favor publications that offer native advertising as a nontraditional alternative.
Marketers favor branded content because it allows for relevant and targeted messaging. However, there is a hazy distinction between what is actual content and what is paid for by a sponsor. Online ads are effective because they let a company know when a consumer downloads a coupon, posts a product review or goes shopping on a site and buys its product.
It is the publisher’s responsibility to ensure the material contributing to their publication does not harm or mislead their readers because marketers will continue to utilize the most effective methods of product promotion, even if it isn’t in the consumer’s best interest.
The marketing industry is fast-paced and dynamic and marketers are able to pioneer effective advertising techniques by pushing the envelope on conscious methods. The consumer’s best interest, however, should not be forsaken in the pursuit of profit.
After all, people should always be more important than profit.
Rather than publishers creating independent content and getting advertisers to support it, the new advertising practice is to approach a publisher and say, “I want you to run a story that is compatible with my product. It doesn’t have to promote my product, but it has to puff it up in some ways,” explains Chris Jay Hoofnagle, director of Information Privacy Programs at the Berkeley Center for Law & Technology.
Generating content based on payment or sponsorship is an extreme conflict of interest and a transgression that misleads consumers, who are unable to determine if content is accurate, fair and thorough.
Major social media platforms like Facebook, Twitter, and Instagram, as well as highly acclaimed publications like The New York Times, The Wall Street Journal and Forbes implement ad integrations on desktop and mobile that match both the form and function of their editorial feeds.
In fact, The New York Times annual report specifically named native advertising and online advertising as the largest contributors to the “modest” revenue growth of the Times in 2014.
The danger of renowned publications like the Times utilizing native advertising techniques is that it opens the door for other publications to follow suit. In order to prevent the spread of native advertising, The New York Times should stand up to marketers and demand the use of advertising techniques that don’t mislead readers.
Native advertisements perpetuate citizen’s mistrust of media because they are unable to distinguish between real and fake news. If citizens don’t trust news organizations to provide them with fair and accurate news, they are more willing to reach out to outside news sources such as Facebook, Twitter, or BuzzFeed. The problem with these sources is that they don’t always provide accurate news, so relying on them for information potentially misleads citizens.
Talk of fake or biased news was prevalent throughout the 2016 presidential election. Donald Trump’s claims of fake news and liberal bias within the media played into people’s mistrust of the media industry and exacerbated their fear of being fed misleading information.
In this sense, Trump is right. The purpose of media is not to mislead or misinform. In fact, its goal is quite the contrary. Accordingly, native advertisements, which are frequently presented as unbiased editorial content, only widen the divide between the media industry and consumers.
According to MediaRadar, if the Federal Trade Commission was to conduct an audit of publisher’s ads in 2016, an astounding 70 percent of websites wouldn’t be in compliance with the FTC’s latest protocol. Similarly, only one-third of publishers label native ads properly to adhere to FTC guidelines. These guidelines aim to clarify any uncertainties and assert that a publication must distinguish what is sponsored content versus traditional editorials.
Native advertising is not a recent manifestation; in 1912 Congress passed the Newspaper Publicity Act which required publishers to label advertisements that resembled news stories and editorials. Publication companies have a critical responsibility to readers. Adopting the craft of native advertising means levying credibility. I t is essential that a publication abides by specific guidelines to ensure integrity.
When publications fail to clearly label advertisements and sponsored content as such, they are exploiting consumers’ trust and using deceit as a mechanism of persuasion.
“When people are presented with a story that looks like a story, they think it’s a story,” says David J. Franklyn, professor and director at the McCarthy Institute for Intellectual Property and Technology Law at the University of San Francisco School of Law.
A survey of 10,000 people in the US and abroad determining consumer knowledge of native advertising and search advertisements disclosed startling findings when presented by Franklyn.
“What we’ve found is that there is deep confusion about the difference between paid and unpaid content.”
It’s unsurprising that consumers are unable to differentiate between real and sponsored content, seeing that only five percent of websites reviewed by MediaRadar in 2015 included the word “ad” in their native advertising. The most preferred terms, “sponsor” or “sponsored content,” accounted for 54 percent of native advertising labeling. Worse, of native ads published in 2015, 12 percent contained no label or identification at all. Hence, it’s nearly impossible for readers to make the distinction.
“The word ‘advertisement’ tells people what is being done to them,” says Robert Weissman, president of Public Citizen consumer advocacy group. “The whole point of the word ‘sponsored’ is to avoid calling it what it is.” Using flowery language makes it seem as though marketers are purposefully misleading consumers.
The FTC acknowledges it doesn’t know what it going to happen when advertising stops being obvious. The purpose of advertisement is to persuade, not mislead. Hence, the responsibility is now on the consumer to demand transparency from publications. Only through transparency can credibility and trust be established.
Preserving an equal-access, unbiased media means steps must be taken immediately to prevent further blurring of the lines between real and sponsored content. The FTC recently announced it will hold publishers responsible for misleading content largely because publishers are no longer traditional distribution channels.
Bob Garfield, MediaPost columnist and co-host of On The Media captures native advertising perfectly.
“With every transaction, publishers are mining and exporting the rarest of rare resources: trust. Those deals (with advertisers) will not save the media industry. They will, in a matter of years, destroy the media industry.”
Alaina DiLaura is a 19-year-old mass communication and international studies sophomore from Baton Rouge, Louisiana.