Native Ad Disclosure: Creating Meaningful Relationships

Is it time for marketers who use native advertising to wake up to the fact that they could be causing potential damage to their brands by creating the impression that they are trying to fool their consumers? Specifically, they are failing to adequately signal to users that the content they are about to see, which has been crafted to look like the editorial of the host site, is in fact a paid ad.

Two recent judgments against some leading content discovery platforms indicate that this is a global problem:

  • In May, the National Advertising Division of the U.S. Better Business Bureau made a ruling recommending that a video-content discovery engine modify its native advertising “recommendation widget,” declaring that its “ ad units do not clearly and conspicuously disclose that consumers are being directed to advertisements.” The Bureau referenced the FTC’s guidelines to online advertisers requiring that “any labels and visual cues used are sufficiently noticeable and understandable to consumers.”
  • Last week, the Advertising Standards Authority in the U.K. banned a promotion by another leading discovery platform, which provides recommended links to advertiser-funded articles for thousands of websites The ASA said the link “You may also like these”  “was not identifiable as advertising,” therefore breaching the U.K. advertising code.

The threat of government regulation aside, common sense would dictate that advertisers need to provide consumers with a heads-up when they are about to experience paid-for content -- especially if it looks like editorial from a trusted news source.  After all, marketers are going online to try to engage one-on-one with consumers. But meaningful relationships require meaningful disclosure. Relationships that start off on a misleading premise are unlikely to prosper.

And it’s so unnecessary, assuming the content is something the advertiser is proud of. As Bob Garfield has pointed out, “If the content is so wonderful, the advertiser should want his fingerprints -- and logo -- all over it.”  Appearing to disguise a brand association could imply the opposite. Garfield has a simple guideline for meaningful disclosure: “if you want to run advertising that could be mistaken for editorial content, the advertising must be prominently labeled, ‘This is an ad.’”

Certainly the IAB is in agreement; its guidelines for native advertising disclosure state that “Regardless of context, a reasonable consumer should be able to distinguish between what is paid advertising vs. what is publisher editorial content.”

This is as true for publishers as for advertisers. They need to have clear standards for disclosure so they don’t hurt their editorial credibility. This is especially true for news/information sites, as opposed to pure entertainment: one study indicates that viewers would be three time more concerned about a brand creating content in a publication like the  New York Times than Buzzfeed. (The Times is well aware of this, and gets high marks for ensuring readers can differentiate between native ads and editorial).

Given its ability to attract user attention, native advertising has a place in a marketer’s toolkit. But like many sharp tools, it can cause a lot of damage if it’s not used properly: not just to the individual brand, but, by violating consumers’ trust, potentially to the concept itself.

And trust is central to a relationship. Charlie Munger of Berkshire Hathaway said, “The highest form a civilization can reach is a seamless web of deserved trust. Not much procedure, just totally reliable people correctly trusting one another.” In such a world, regulation is not needed, either, as everyone can be trusted to do the right thing.

Clicks and exposures can be measured easily. The damage caused by creating a negative brand impression is a more difficult metric -- but the fact that it isn’t measured doesn’t mean it isn’t real. A well-respected associate of Munger’s  -- aka The Sage of Omaha -- has said that “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.”  Marketers, take heed.

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1 comment about "Native Ad Disclosure: Creating Meaningful Relationships".
  1. Anni Paul from BoscoSystems , June 30, 2014 at 12:04 a.m.
    Native advertising has definitely matured as a practice because it really had no choice to because of the undue pressure put on its practitioners. Now that the NYT has obviously put transparency issues to rest, I hope critics and regulators will stay out of native advertising's way this year as it moves into mobile. What Airpush, MoPub, and Tapsense are doing is really exciting and native ads on mobile need nothing but support at this point. They're going to change advertising for the better for consumers, advertisers, and developers. http://techcrunch.com/2013/10/10/airpush-acquires-hubbl-for-15-million-to-bring-native-ads-to-mobile/