A Third Of Native Ads Fail To Comply With FTC Guidelines, Less-Explicit Ads Perform Better

Nearly a third of native ad placements fail to comply with federal disclosure guidelines, according to a report released on Monday by Polar, a native advertising developer. More significantly, the study suggests publishers may not be complying because the explicit nature of federal recommendations may not perform as well as more ambiguous approaches favored by some publishers and advertisers.

The report, “The State of Native Disclosure: How Premium Publishers are Disclosing Native Promotions of Branded Content,” analyzed 137 native placements across 65 publishers and found only 55% of them utilized the term “sponsored” and 4.5% used the term “advertisement,” adhering to Federal Trade Commission guidelines that native ad placements are explicitly labeled as sponsored advertising content.

The remainder either had no disclosure at all or utilized more ambiguous terms such as “promoted,” “presented,” or “partner.”

In guidelines it published in December 2015, the FTC said such ambiguous terminology could potentially “mislead consumers that advertising content is endorsed by a publisher site and/or that the advertiser did not create or influence the content.

While Polar advocated adhering to FTC guidelines, and even provided links to the FTC’s recommendations and enforcement policies, the study found that one factor may be that more obscure terms actually perform better than explicit disclosures.

Among the study’s findings:

  • “Promoted” was found to be the best performing term, with a 0.19% click-through rate (CTR), compared to “Sponsored” with a 0.16% CTR.
  • On desktop, the term “sponsored” marginally outperformed “promoted” by approximately 26%.
  • On mobile, “promoted” content vastly outperformed “sponsored” content by 105%.

Greg Bella. Polar’s director of product marketing said that depending on which device type a disclosure term is used on, the impact on CTR performance can vary.

Editor's Note: This is a slightly revised version of a post published earlier in Media Daily News.

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