How Publishers Pivoted to Meet FTC’S Native Guidelines
[Sponsored] A year after the FTC’s ruling, how many publishers are compliant?
Last year, after the FTC released native advertising guidelines, an alarming amount of publishers were found to be noncompliant. According to ad sales intelligence platform, MediaRadar, in December 2015, 70% of digital publishers needed to modify their current native advertising based on the guidelines.
Initially, publishers were wary of FTC native enforcement. But in March 2016, the FTC settled the first native advertising case against retailer Lord & Taylor for not disclosing a native article in Nylon and sponsored posts by Instagram influencers for a Lord & Taylor dress which quickly sold out. For each FTC native violation, the penalty is up to $16,000.
Publishers realized they needed to modify ad formats to reflect the new guidelines. In October 2016, MediaRadar found that 61% of the sites reviewed are now native compliant. This represents an increase of 119% from December of 2015. Although that still leaves a significant gap of sites that aren’t labeling sponsored content.
Using the words “sponsored” or “sponsor” remains the most popular way to label native advertising at a whopping 74%, compared to other common terms such as “promoted,” “presented by” or “partner content.” And placement for disclosure is now above fold and prominent with 68% of native ads labeled above the ad or article.
Interestingly, 14% of the websites reviewed, label native in more than one way throughout the site. And more surprisingly, five percent of websites reviewed still do not identify native content at all.
Native continues to see explosive growth. Demand for native is up 262% in the last 19 months according to MediaRadar. This shows how quickly publishers were able to pivot ad offerings to leverage this high-CPM ad unit.
As a reminder, here are the seven FTC guidelines:
Disclose Advertising. When the promoted or sponsored content mimics a website’s look-and-feel, a disclosure is necessary. Readers need to know what content was influenced or paid for by advertisers. Of all of the points in the FTC guidelines, this is emphasized the most.
Use Precise Language. The FTC is explicit that words like “presented by” or “promoted by” are not sufficient notice. Instead use words like “Paid by” or “Advertiser.”
Include Advertiser Logo. Include the advertiser’s logo in all native advertising. This reinforces to the reader that this is a paid placement, not regular editorial. Example: Forbes does an excellent job of this in their Brand Voice program.
Ad Position Matters. Location of an ad’s acknowledgement should be at the top left corner of a native ad (today they’re usually identified at the bottom). The disclosure for ads and commercial content should appear near the ad’s focal point and headline.
Video or Sound. Video and sound ads are more complex, since it’s typically a two part ad consisting of a thumbnail preview and full-size ad. Publishers are not allowed to use “deceptive door openers” to induce consumers to click an unidentified thumbnail. When a reader clicks on a native ad or video, they should not be surprised to arrive at the brand’s site. In cases where a thumbnail opens to a pop-up or full page, a disclosure is needed on both the thumbnail and pop-up. Audio disclosure must be in a sufficient volume and cadence, so consumers can hear and comprehend it. Visual disclosure must be on the screen long enough to be noticed or recognized.
List the Author. For native stories or articles, the publishers should clearly identify the advertiser as the article’s author. Disclosure should be placed under the headline. Some companies have been creative with listing the author’s credit. Here’s a compliant example in BuzzFeed’s “15 Things You Didn’t Know About 15 Captains, Commanders And Conquerors” the author is listed as Captain Morgan.
Native Ads Need Separation from Editorial. Native ads should feature a prominent border to distinguish an ad from editorial content. Another solution, is to have background shading to create emphasis for native. We see a huge portion of native ads today that have no border at all.
For more on native, see Six Things We Know About Native Advertising.