We’ve interrupted your program to give you this message: native advertising continues to grow and falls under FTC scrutiny
Scrolling through news headlines recently, I paused on one, but quickly moved past it when I saw the “Sponsored Content” tag. It’s a phenomenon that is on the rise as publishers try to offset the cost of declining ad revenues with native advertising.
MediaPost.com reported recently that advertisers preferred this kind of advertising because it avoids the “interrupted” advertising that most consumers habitually ignore. Interruptions aside, I still didn’t read the article because I knew it was advertising. But despite my own experience, native advertising is an increasingly popular practice.
According to NYPost.com, the native advertising market is expected to grow from $1.6 billion in 2012 to $4.6 million by 2017. That’s not surprising given the number of publications that have gotten on board with it this year, one of the most recent being the New York Times. DigiDay.com noted that the Online Publishing Association found more than 70 percent of its members have native offerings and 90 percent will soon.
AdAge.com reported last month that Kopit Levien, who also oversaw Forbes magazine’s BrandVoice native advertising platform, had joined the Times for similar endeavors. The plans include bringing in writing talent for sponsored content that is completely separate from editorial.
A recent MediaPost.com article said that McClatchy, Lee Enterprises, Gatehouse Media, Source Interlink, USA Today Sports Media Group, Entrepreneur Media and Reader’s Digest had all signed up with Nativo, a company that AdWeek noted is one of six companies trying to help scale native advertising. The New Yorker, Harper’s Bazaar, Hearst Magazines and the Washington Post have all thrown their hats in the sponsored content ring, while last month the Associated Press signed a deal with Polar, another native advertising platform provider. Meanwhile, Buzzfeed and the Huffington Post are known for their native practices.
Given sponsored content’s resemblance to editorial content, the Federal Trade Commission put sponsored content under scrutiny in a workshop last week called Blurred Lines: Advertising or Content. DigiDay.com reported that FTC chair Edith Ramirez said native advertising must be done lawfully. “By presenting ads that resemble editorial content, an advertiser risks implying, deceptively, that the information comes from a non-biased source.”
Although there has been no attempt at regulating this kind of advertising yet, the Interactive Advertising Bureau recently released suggested guidelines. The 20-page white paper boasts “six native ad categories and six marketplace considerations,” and concludes that publishers need to use clear language showing that content is sponsored.
Whether the FTC decides to regulate advertising or not in the coming year, the industry seems to unanimously accept that labeling is the key to maintain ethical editorial practices. Although there will no doubt be slip-ups, it will be more interesting to see how going native will ultimately offset other areas of declining revenue.
–Katrina M. Mendolera
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