The market for native advertising has been growing at a brisk pace in the last couple of years, however, the recent guidelines by the Federal Trade Commission (FTC) has the potential to stymie growth.
Native advertising has worked out well for global brands, who are using platforms as esteemed as Forbes and The New York Times to place native ads; however, on back of strong pressure from consumer protection groups, the FTC decided to issue stringent guidelines just before Christmas last year.
Native Ads: Targeting the Modern, Tech-Savvy Consumer
Native ads are more popular among users and less intrusive than banner ads. Also, given the growing trend of mobile internet, these ads tend to fit in more coherently than other forms of online advertisement. However, they are so closely aligned to the content on a website that users sometimes find it extremely difficult to differentiate them from editorials. According to a study published in the December edition of Journal of Advertising, only 7% of respondents were able to identify a native ad.
What Does the FTC Say?
What the FTC guidelines seek to achieve is to prompt brands to clearly call a spade a spade. Instead of labelling ads as ‘promoted’ or ‘sponsored’, which to a layman, can be highly ambiguous, advertisers will now have to use more clear terms, such as “advertisement” and “sponsored advertising content.” Representing the interests of advertisers, the Interactive Advertising Bureau said the FTC guidelines were “overly prescriptive.”
The Future of Native Advertising
Although the FTC guidelines have raised concerns over the prospects of native advertising, analysts at Future Market Insights (FMI) believe the industry will use its innovation to tide over any forthcoming challenges. “Native advertising has been around since the time of radio and print magazines. Although FTC guidelines will definitely have an impact on how advertisers promote their brands, the future for native advertising still looks bright,” said Nandini Roy Choudhury, consultant at FMI.
Now that the FTC has come out with these guidelines, publishers, brands, and advertising agencies will need to work in more synchrony with each other. There are a number of ways in which publishers and advertisers can comply with the FTC guidelines, instead of simply shouting from rooftops that “This is an advertorial”.
Future Market Insights is a global research and consulting firm based in Valley Cottage, New York. A free sample of its report on the Global Native Advertising Market can be accessed at http://www.futuremarketinsights.com/reports/sample/rep-gb-992
The language and choice of font and colour are some of the factors that FTC will consider while determining whether a native advertisement meets the guidelines. For native ads on video-centric websites, where focus on text is bound to be lesser, publishers need to pay specific attention to the thumbnail image and issue a disclosure.
A key point to note in the FTC guidelines is that it is not only the advertiser who will be held responsible and penalised for failing to disclose native ads but also the publisher. So, content sites and blogs, which of late, have become a favourite advertising platform for global brands, will need to be more responsible towards what they choose to publish on their sites.
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The future still is promising for both publishers and advertisers, as native advertising has become a successful model of getting the word out on digital media. For brands and publishers to successfully leverage it to their advantage, without being caught on the wrong side, the need is to create content that is so persuasive that the user doesn’t mind clicking on it even when the label, “Sponsored Advertising Content’ is clearly and transparently mentioned.