Why It’s Time to Standardize Native Ad Labels

By Melanie Deziel February 10th, 2016

Last month, The Wall Street Journal published “Sponsor Generated Content” about the history of hedge funds to promote a new show on Showtime. In the summer, Dell’s logo showed up on a story about the future of medicine as part of Forbes “BrandVoice.” And shortly before that, a “Paid Post” for Airbnb about the history of Ellis Island appeared on The New York Times.

Are these labels all signifying the same thing? Maybe. Maybe not.

The vague definitions of native ad and sponsored content disclosures have been widely discussed over the last few years. In fact, in the fall, Contently put out a study about how well Internet users can identify the differences between native ads and purely editorial articles. The biggest takeaway: For just about every publication, readers were confused trying to separate the two types of content.

The fight for clearer sponsored content labeling has largely been positioned as one that would benefit consumers and put journalists at ease. The assumption here is that brands need trickery for their work to perform well. But as native projects have gotten more sophisticated—to the point that some are outperforming editorial work on major news sites—that assumption needs to shift.

Why? Because not only is native ad labeling ethically important, it’s central to the content’s purpose.

Despite inconsistent disclosures, most popular publishers have embraced the practice. A few sites that adopted the practice early and in earnest have seen the investments pay off. The New York Times made more than $18 million on branded storytelling in 2014, which accounted for a tenth of its digital ad revenue. Gawker gets nearly one-third of its revenue from native advertising and sponsored e-commerce. BuzzFeed, meanwhile, earned more than $100 million from native revenue in 2014—completely eschewing most legacy revenue models—on its way to a $1.5 billion valuation.

To break through the clutter, the native advertising that’s a part of this growing market tends to be much more editorial in nature than “advertorials” of yore. It’s also safe to say that plenty of native projects are just as ambitious and creative as a lot of editorial—addressing comparable topics, using similar aesthetics, and sometimes even employing the same writers.

While that’s great news for consumers in search of higher-quality content, it leaves journalists and editors worried that their work will be indistinguishable from sponsored content, which are often displayed through the same content management systems and feature the same fonts, layouts, and navigational elements. Advocates for more overt disclosures push for shading, prominent labels, and clearer language to help ensure that editorial credibility isn’t used as currency to buy exposure for an advertiser.

Marketers push back by suggesting that over-disclosing turns off potential readers. By making them look too different, you may be signaling that native ads aren’t content at all, stripping them of their primary appeal to advertisers.

But the only way this back-and-forth improves is when business teams and editorial departments figure out that it’s in their best interests to be on the same side of the issue.

A native ad with no brand presence is of little use to the advertiser, which is allocating time, money, and other resources to get in front of potential customers. If that happens, then brands will be unlikely to pay publishers for access to their audience. At that point, both sides lose.

However, consistency may soon be on the way.

In December, the Federal Trade Commission updated its disclosure standards and offered a guide to help publishers better understand how to label their ads in ways that aren’t deceptive. The Interactive Advertising Bureau also has a set of best practices, released in the form of a playbook, that offers explicit advice. While the two organizations still define and evaluate “clarity” somewhat differently, publishers seem to be more receptive to the rules in place.

With so many different interests at stake, it may be tough to settle on a single label that will solve the problem. But now, more than ever, it’s crucial that all of the parties involved make an effort to agree on a set of concrete standards. Data from Business Insider projects that the native advertising industry will generate $20 billion by 2018. It’s time for publishers to get on the same page—or, at the very least, start working together when deciding what to call the page.

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