Shining a Light on the Native Advertising Debate

by Susan Getgood on January 20, 2014

in Blogging,Ethics,Influencer Marketing,The Marketing Economy

Disclosure: I am Vice President, Influencer Marketing at BlogHer. Advertising and social media marketing programs are a significant source of revenue for my company and for the bloggers in our advertising network.

In December, the FTC held a workshop on Native Advertising,  the practice of embedding/including advertising messages in editorial spaces. Prompted by concerns that publishers are not disclosing sufficient information to consumers, the workshop was mostly focused on native advertising on publishers’ sites and portals. Although there are some implications for sponsored content on independent blogs, there was nothing in this workshop that replaced or changes the endorsement guidelines updated in 2009.

The FTC regularly holds public workshops to discuss and document the points of view on a topic for which they might issue a regulation.  Nothing really new comes to light, but the workshops are a good way to understand the current market thinking on a topic. How it works in a nutshell:

  • Participants file a public comment on the matter with the FTC in order to be “invited” to the workshop (and not all are given speaking slots).
  • During the workshop, the participants clarify and defend these previously established positions.
  • Often participating organizations time related press announcement to the workshop date to maximize the reach of their point of view. For example, the IAB released its Native Advertising Playbook on December 4th, the day of the workshop.
  • Following the workshop, the FTC may (or may not) eventually issue regulatory guidelines.

If you aren’t on the hot seat, FTC Workshops are excellent policy wonk theater. From the coverage, this one did not disappoint. Seen on Twitter, largely paraphrasing commentary by columnist Bob Garfield:

raju: “We are all trying to make money” Yes, but with a “boatload of shit.” Arguments fly in US @FTC hearing on #NativeAds

sulliview: “A conspiracy of deception. A hustle. A racket. A grift.” And other kind words for native… h/t @raju

If you were looking for a conclusion or a ruling, though, you would definitely be disappointed at the outcome (to-date) of the workshop. As is often the case, FTC workshops end with everyone realizing just how a) far apart the various protagonists/antagonists are on the issues and b) how confusing the topic is, both organically and as manufactured by the protagonists and antagonists.

Among other issues, the different players in the online media industry are using the term “native advertising” to mean  multiple, often disparate things. Many of which already existed in somewhat similar form, online and off.  At best, this makes conclusions about concrete action difficult for the regulators.  At worst, it makes it obvious that sometimes the lack of clarity is deliberately intended to confuse consumers about the paid nature of the content and implied endorsement. Online and offline, sometimes it is just hard tell where the editorial ends and the advertising begins. Blurred lines (the name of the FTC workshop) indeed, and certainly why the FTC intends to keep a sharp eye on native advertising in the coming year.

I’m watching the ongoing debate with some interest. In part because HULLO ethics policy wonk here! but also because these discussions about native advertising impact my work with brands and influencers at BlogHer. We’ve been doing sponsored content for years, both on and on the blogs of our Advertising Network members, and have long been a proponent of clear and prominent  disclosure of sponsored relationships, even before the revised FTC endorsement guidelines.

Sponsored posts are considered a form of native advertising. I’d argue that sponsored posts are the original native advertising, and many of the newer portal- and publisher- based forms are attempts to mimic the word-of-mouth potential of an authentic influencer endorsement. Other native ads are advertorials that blur the lines between the native editorial of a publisher — the magazine content — and advertising. For example, did the sponsor simply fund the space, and the article was written with the usual editorial objectivity of the publisher, or did the advertiser place the article fully written? Both types of post have their place in the content ecology, but sponsorship and in the case of my example, the level and degree of sponsorship, must be disclosed so consumers can make an informed decision.

On one side of this debate, we have the advertising and publishing industry that wants to expand the opportunities to reach consumers with marketing messages. And on the other, we have the watchdogs who are concerned that consumers aren’t getting adequate information upon which to base their decisions.

No one denies the need for disclosure. The sticking point seems to be what is an acceptable, meaningful disclosure.

We are arguing about the wrong thing. We are having a debate when we should be having a conversation. And not about the best way to disclose. Shaded boxes versus color cues, or whether we call something an ad, advertorial or sponsored, trap us in the minutiae of old media models.

One of the most interesting topics discussed during the workshop was a study conducted by the McCarthy Institute for IP and Technology Law. Among other things the study found that 50% of respondents did not know what sponsored advertising meant.  The study also suggested that consumers don’t care that much. Reported website emedia|vitals:

One question looms even larger than how publishers label the native ads that run on their site: Do consumers care? One-third of respondents in the McCarthy Institute study said they are not concerned about the difference between ads and editorial and that they would actually be more likely to click on something they think is an ad.

“So the important baseline question is, what are we protecting the consumer from?” asked Franklyn [McCarthy Institute Director David Franklyn]. “A growing number of consumers enjoy the hyperstimulation of the work that advertisers and publishers do. They don’t care whether it’s paid or unpaid – they may just want to be entertained.”

Should consumers care? Does it matter?  It seems that consumers aren’t nearly as fussed about whether a message is paid or unpaid as long as they can trust its credibility and the message is relevant and interesting.  This shouldn’t surprise us — it is the foundation upon which social media, and social media marketing, is built. That said, it is extremely important to note that while the consumer may not care whether an endorsement is paid or not, it is still vital that she know whether it was paid or not. Without disclosure, there is no foundation for the trust upon which social media engagement relies.

Trust and Relevance. 

Rather than get bogged down making advertising look like editorial because we think it increases its trust value if it looks “native,” let’s take a deep breath and realize that the consumer doesn’t care whether it is paid, owned or earned. Shareability is the new social currency.

I have written about this before so I am no less guilty of using the FTC workshop as a soapbox than any of the participants.  But it bears repeating: Developing a story so good that consumers are driven to share is the real goal. It’s not an either/or — either you use paid media OR you use earned media OR you use owned media.The best marketing strategies rely on all three tactics.

  Sharing Venn Diagram

Shared Media: Social’s New Currency
Source: BlogHer

And don’t shortchange disclosure in an attempt to make the message more appealing. It’s not necessary, and when you do so, you begin your relationship with your customer based on a lie. And really, that never works out well. In life or in business.

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