A Need for Laws Governing Native Advertising
Introduction
In the contemporary world, more than 75% of advertisers have opted to focus on native advertising as a means of keeping businesses competitive in the market. Native advertising is a form of marketing that matches the function and structure of the platform upon which it is displayed. In most cases, it works similar to an advertorial and manifests an editorial, a video, or an article. In most cases, native ads are placed on social media feeds or web pages as recommended content. Distinct from banner or display ads, native ads do not appear like ads. Native ads appear to be part of the editorial page flow. The objective makes it non-disruptive, implying that it exposes the viewer or the reader to content minus sticking out like a sore thumb1.
Supporters of native advertising continue advocating for it terming it “the second coming,” but its critics perceive it as commercial masquerading of content. The increased use of native advertisement has prompted several critics to question its legality. The big issue is that, while native advertisement may be deemed legal, there is a need to regulate its use. This research paper examines the need to regulate the use of native ads in various contexts. The paper explores the need to regulate native advertisement by examining its effects, which calls for policymakers to enact laws that govern its use. The paper has also looked into several ways native ads bypass current FTC guidelines.
Background
Native advertising has been existing as early as the 1930s. However, the world of digital marketing has embraced the use of native advertising since 2013. In 2014, America started reporting the state of native advertising using a survey that involved over 2000 participants revealing minor or no implications at all in the area. 2013 seemed to be a year of discussion and debates followed by the year 2014, which was time to invest and adopt2. Native advertising phenomenon is not an isolated concept. The concept appears to be the latest transformation in the long, fascinating advertising history. During an era where the vast majority of promotions take place over the internet along with programmatic advertising, more people are still clueless about where the industry is headed. In 2013, Marketing Newsweekly reported that the increasing use of online advertisement was due to the growth of mobile handset ads, increase penetration of the internet, as well as the expansion of movie and music distribution. Native ads should not be confused with in-feed ads as the latter is simply an old-fashioned banner advert camouflaged in the news feed ad do not offer relevant content. In December 2015, the Federal Trade Commission outlined guidelines to use for native advertising. Since its inception, there are no clear rules and regulations to monitor the use of native adverts. These guidelines called for uniform labeling.
Laws governing native adverts
Since its inception, there are no clear rules and regulations to monitor the use of native adverts. In December 2015, the Federal Trade Commission outlined guidelines to use for native advertising. The International Advertising Board (IAB) labeled the guidelines as overly prescriptive, suggesting that publishers and advertisers do not want to make these ads readily discernible . Every country normally has its rules. The most common labels used on online platforms are Advertisement, Ad, sponsored, Featured Partner, Promoted, or Suggested Post at the top or bottom of the adverts. On some occasions, the sponsor’s brand name is mentioned and appears as “Promoted by brand,” or “Sponsored by brand,” among others. However, there is no agreed industry standardization for disclosure. Additionally, to make matters more complicated, some disclosures are hard to understand. While Ad next to sponsored appears on a search result’s search engine might be clear, one may wonder what an article Sponsored by brand implies. One may wonder whether it is a TV show “Brought to you by brand name” or is the brand having some input in the article’s content generally.
Native ads have their downsides as well. It has been established that native adverts have a basic form of deception. While some authorities argue that deception is not allowed in advertising, some have argued that it has been observed that the less probable a piece of native content appeared an advertorial, the more a viewer was interested in it3. Some opponents of native advertising perceive it as an elaborate term for advertisement used to profit other businesses.
While those who successfully create and use native ads and manage to publicize without much consumer backlash have greatly profited from this form of advertising, those without enough recourses and skills to do so are perhaps positioned to fail. Tinder monetization saw its chairperson assert that the app’s identity that is not yet defined suggested that maybe native advertising could probably explain an existing product in its entirety. Other companies like Eyeo aims at furthering the native advertising style by availing a plug-in application called “Ad-block Plus,” which blocks all other forms of advertisement except native ads by default. The company argues that they are non-profit while the companies funding them stand a better chance of profiting significantly in native case ads are to be the only allowed form of an advertisement on online platforms. With the ability of software such as Ad-block plus, which can control the adverts that can or cannot be seen (unless specifically allowed by the user), the concern over online advertising monopoly is rife.
The elusive and often concealed nature of native ads has raised important questions concerning its format to deceive consumers. Native adverts have been established to be blurring the line between ads and both consumer and editor-generated content, making it difficult for consumers to distinguish. Consumers may fail to identify native ads as marketing posts, thereby making them respond more positively to them. This depicts the same challenges posed by infomercials and advertorials as well as artifact placement or entrenched advertising, where the significant regulatory apprehension is deception through omitting or masking the real source of information. Some disclosure regulations outlined by the FTC also raise concerns since they appear to be effective in a minimal way. According to the FTC, Advertising results in ad recognition only 12.5%, Sponsored, which many claims that boosts ad recognition associated with a control by either 6% or by 14%. Additionally, another problem arises when both market research and consumer groups find disclosure requirements being inadequate among publishers, brands, as well as influencers. FTC has sent repeated letters warning influencers avails additional evidence of not complying.
The concept of deceptive marketing is not a new strategy. It has appeared in different forms in the past. The FTC has been mandated to put in place rules and regulations to curb deception. In an article explaining native advertisement, but focusing on the “ad” form, the authors designed market practices typology that “conceals” the source or format of info. The authors conclude that while existing laws hugely emphasized the masked form of marketing, it also important to note that advances in marketing are at a faster pace compared to the time taken to enact regulations. As a result, marketers have been relying on existing regulations that, at times, appear similar but somewhat different. Internet evolution, as well as various media forms, has made online marketing to evolve in a rapid manner than was expected. In most cases, the development of online marketing has been so rapid in a way that it seems to test, probe, and exploit existing laws. This is particularly evident in the forms of native advertising, which generally disguise both the format of an “Ad” as well as its real source, which in the end intensifies masking practices. While the intent of existing regulations remains relevant and reasonable to the industry, alterations to how advertising is produced, broadcasted, and perceived remain a blurring boundary and challenging common operationalization of approach key to deception policy4.
Challenges native advertising is posing to FTC.
This is the high time for the FTC to respond since native advertising not only challenges a single boundary but rather takes advantage of complexity existing along several dimensions. Native advertisement seems to be pushing the doors of existing laws in peculiar ways dissimilar to prior forms of advertising such as embedded or covert adverts4. The internet has enabled the emergence of new forms of online media where users have the option of viewing whatever they like. This myriad has also been mirrored online marketing and its linked disclosures, which, in a way, challenges a user’s ability to distinguish different ad formats and sources. Standard disclosure was previously perceived to be a complicated matter in the context of television, but now seems appropriate.
Another factor is that the internet has revolutionized how consumer and advertising content blend to a deeper extent as compared to earlier levels with more traditional marketing platforms. While print and television advertisers use internet platforms to push the boundary with non-advertising content in the form of ads such as advertorials or infomercials, it is evident that traditional media content does not originate from different consumers. On specific social media platforms such as Facebook and YouTube, adverts and consumer-generated content are amalgamated. The chances of this causing problems are high with influencers, consumers being paid to endorse particular products, and the emerging trend of micro-influencers as well as influencers with a small number of followers. The risk of causing harm to the consumers is high in case an advert is confused with word of mouth than mistakenly taken for editorial or entertainment purposes. At the same time, celebrities who have been known to be brand ambassadors have gain popularity through increased social media following. This aspect prompts firmer individual connection between the celebrity and the consumers, which can affect a celeb’s ability to influence advertising. Native advertising raises questions around the nature of celebrity, as well as the line that exists between free speech and advertising
, where friends pose as endorsers, and celebrities and endorsers take a “friend’s” role.
Native advertising also uses persuasion, an element that is considered crucial in assessing deception. Since a sales-focused native form of advertisement is likely to be acknowledged, most native adverts remain minimally persuasive. Generally, many in the marketing industry perceive a successful native advert as one that has subtle quality or some form of storytelling. An article-based native advert might feature or mention a product, but usually in a peripheral way but not in a sale-oriented or aggressive way. At the same time, a consumer influencer may post a native advert that is a simple picture without or with minimal product-related information. While recent FTC guidelines allow images to have an implicit claim, the guidance is justifiably blurred. In general, FTC guidance lays much emphasis on visual applications, which are more material in nature, such as labeling food as heart-healthy. Another problem is that some native ads, such as article-based native adverts from publishers such as The Guardian, display topics that are wholly unrelated to the advertising company or agency. They usually focus on better alignment with the idea of sponsorship instead of advertising and pose little deception risk. Current FTC guidelines that can be used in courts to decide what makes a commercial speech appears to support this stance.
Possible Policy Response
The possible policy response to native adverts and marketing can be looked at from both preventions as well as enforcement viewpoints. It is important to consider prevention since it would be better to prevent deception from taking place in an ideal world scenario. It has been established that native adverts normally take advantage of complexity in the current operationalization of many concepts that are key to deception. While the official rules controlling deceptive adverts seem sound, the FTC should be more definitive in the policy document they approve for use. This should include specifying rules, which unambiguously need a disclosure on certain occasions. Additionally, the FTC should consider developing clear and straightforward criteria used in determining when disclosure might be relevant.
Given the complexities inherent to native adverts as well as the online platforms that it appears, FTC should consider making numerous clarifications together with assumptions. To begin, in the scenario where any information that mentions or displays a product for which a linked consideration was provided, a claim should be assumed existing; this should be regardless of whether explicit spoken or written language exists. This will do away with the need to enact complex regulations that can be used in assessing claims in a video or an image or come up with a definition of what makes an explicit claim. The FTC should also come out clearly that celebrities on their own do not warrant them sufficient go-ahead to advertise online. FTC should require both celebrities and consumers to attach disclosure on any piece that is considered an advert. This will make the cost to be minimal, and the benefit to the public will be clear. Such a necessity seems to be already being alluded to by current FTC policy that stipulates that even celebrities must attach a disclosure whenever a material connection might not be anticipated, such as during live events that may include interviews.
The elusive nature of persuasion typically used in native adverts seems to be challenging the idea of materiality, which has been used in assessing deception in the past. The FTC’s recent revision to contemplate a material as not just a purchase but as well increased ad interaction n is commendable. The FTC should also consider any content featured in a native ad as material any increased awareness. This might involve increased online visits to a particular store or increased searches, which can be tracked via cookies and geolocation data from devices. In the same manner, native marketing campaigns, instead of individual ads, are likely to have more effects on consumers. It would be prudent for FTC to consider assessing materiality at a campaign level or a group of related adverts instead of a single ad. The FTC should also consider expanding the time horizon over which materiality is assessed. This will help in reflecting the timeframe of consumer decision-making for a particular service or product. While it is recognizable that FTC has enacted regulations that are broad enough to help in solving some of the effects, unambiguous recognition of them will possibly enough to prompt advertisers’ attention to the matter in question.
The use of terms such as sponsored posts, sponsored content, and sponsored along with native adverts has somehow eroded traditional differentiation between sponsorship and advertisement description. The FTC has, in the past, left open the approach advertisers can use in achieving proper disclosure. However, the robust nature of the online advertisement, as well as associated disclosures, somehow makes it difficult for consumers to distinguish ads and master disclosure. At the same time, manipulating digital content is easy, and when implemented using software becomes virtually costless.
Law Enforcement
When it comes to enforcement, detection should be first. Since deceptive claims are somehow easy to note, native advertising is challenging due to its nature. FTC will contribute, relying on consumers and other consumer advocacy groups for tips. In a real sense, advertising agencies and platforms would opt to be more active in reporting any content that is inadequately disclosed according to their belief. Crowd-sourcing is in a better position to champion this along with other tools other platforms use, such as reporting spam or disallowed content. After detection, the FTC should consider imposing strict measures in enforcing the law, which can promote change in the industry.
Conclusion
With the existence of producers and consumers, the need for advertisement is unavoidable. The use of native ads has increased, making the marketing industry to be complex. This calls for regulation to ensure fairness to both advertisers and consumers. Native advertising has some form of deception that calls for lawmakers to take action by enacting laws to govern the industry. The elusive and often concealed nature of native ads has raised important questions concerning its format to deceive consumers. Consumers may fail to identify native ads as marketing posts, thereby making them respond more positively to them. It is high time FTC responds to some of the regulatory challenges that come along with the native advertisement. The possible policy response to native adverts and marketing should be looked at from both preventions as well as enforcement viewpoints. There is a need to enact a law that will control the use of native ads in marketing.
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Andrews, J. Craig and Thomas J. Maronick (1995), “Advertising Research Issues from FTC
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309.
Andrews, J. Craig and Thomas J. Maronick (1995), “Advertising Research Issues from FTC
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309.
Andrews, J. Craig and Thomas J. Maronick (1995), “Advertising Research Issues from FTC
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309.
Andrews, J. Craig and Thomas J. Maronick (1995), “Advertising Research Issues from FTC
versus Stouffer Foods Corporation,” Journal of Public Policy & Marketing, 14 (2), 301-
309.
Andrews, J. Craig and Thomas J. Maronick (1995), “Advertising Research Issues from FTC
versus Stouffer Foods Corporation,” Journal of Public Policy & Marketing, 14 (2), 301-
309.
Andrews, J. Craig and Thomas J. Maronick (1995), “Advertising Research Issues from FTC
versus Stouffer Foods Corporation,” Journal of Public Policy & Marketing, 14 (2), 301-
309.
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309.
27
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Agrawal, AJ (2016), “Why Influencer Marketing Will Explode in 2017,” Forbes, (accessed June
10, 2017), [available at: https://www.forbes.com/sites/ajagrawal/2016/12/27/why-
influencer-marketing-will-explode-in-2017/#2236ecfb20a9].
Andrews, J. Craig and Thomas J. Maronick (1995), “Advertising Research Issues from FTC
versus Stouffer Foods Corporation,” Journal of Public Policy & Marketing, 14 (2), 301-
309.
27
!
References
Agrawal, AJ (2016), “Why Influencer Marketing Will Explode in 2017,” Forbes, (accessed June
10, 2017), [available at: https://www.forbes.com/sites/ajagrawal/2016/12/27/why-
influencer-marketing-will-explode-in-2017/#2236ecfb20a9].
Andrews, J. Craig and Thomas J. Maronick (1995), “Advertising Research Issues from FTC
versus Stouffer Foods Corporation,” Journal of Public Policy & Marketing, 14 (2), 301-
309.
27
!
References
Agrawal, AJ (2016), “Why Influencer Marketing Will Explode in 2017,” Forbes, (accessed June
10, 2017), [available at: https://www.forbes.com/sites/ajagrawal/2016/12/27/why-
influencer-marketing-will-explode-in-2017/#2236ecfb20a9].
Andrews, J. Craig and Thomas J. Maronick (1995), “Advertising Research Issues from FTC
versus Stouffer Foods Corporation,” Journal of Public Policy & Marketing, 14 (2), 301-
309.