What is Native Advertising and Why Might it Be Confusing?

It’s no surprise that native advertising is drawing the attention of the FTC, which  held hearings on the subject on December 4, although does not intend to regulate the industry at this time.. Not only is there the potential for confusion on the part of consumers, but advertisers and publishers are equally confused. According to Poynter,

“Native advertising is a paid placement that matches the editorial and design style of a given website. “Sponsored content” is a synonym, though other labels like “promoted by” may be used.  This is the digital descendant of the print advertorial, though some contend the potential for confusion is greater.

As long as native advertising is bought and sold direct, and advertisers know where their ads appear, we believe there will be little confusion on the publisher side of  the industry. The ads will have to match the site’s appearance and content, not detract from the user experience, and  will provide publishers with supplemental content that might be of interest to their readers anyway. Publishers have data to make sure this can happen.

On the advertiser side, there is always the danger of providing “marketing spin” rather than content a site’s visitors want to read, and that’s up to publishers to judge. Interestingly enough, this may require publishers to use editors in a way they haven’t been traditionally used — on the business side of the house.

All this can be solved in a direct transaction between advertisers and publisher. Where it could get dicey is when the ads are placed through a network or an exchange, or sold as remnant inventory through RTB. That’s when advertisers may not know what they’re buying, or publishers may find low-quality content appearing on their premium sites.

The FTC, however, doesn’t care about this aspect at all. Its job is to protect the consumer, and it wants to make sure that consumers will have a clear way of distinguishing between sponsored content and “journalism,” however that’s defined in this day and age.  If there are to be regulations, Poynter says they’d probably be around labeling sponsored content, the way an ad tech site like Digiday does when it labels an article “Sponsored” or a consumer site like  Buzzfeed does when it tags a post “Featured Partner.” These early adopters of native advertising, now a segment approaching $2.85b impact in the eyes of EMarketer, will likely have a seat at the table defining the rules.