A phenomenon that has been present as a form of advertising for many years is now blossoming in digital media and the subject of much discussion in the industry:  native advertising.  Native advertising is content that promotes a brand or product in the native format of the website, publication, or platform in which it is presented.  Native advertising looks different for each medium – for instance, a Sponsored Story on Facebook, Featured Partner content on BuzzFeed, a branded or promoted playlist on Spotify, or a traditional advertorial page in a magazine are all types of native advertising.

As more advertising dollars flow away from traditional display advertising into native advertising, the seamless integration of brand messaging into entertainment, news, and other content that native advertising provides has generated concern and debate over the need for adequate disclosure and guidelines to ensure that consumers are aware that the content is advertising as well as the need to keep the content consistent with advertisers and publishers’ core brand values so that consumers will remain engaged.

Last week, the head of Google’s webspam team published a YouTube video reminding advertisers and agencies that they must clearly disclose that native advertising content is advertising, including links that they pay content creators to include in content or paid search links purchased through Google, which consumers may otherwise believe are freely-endorsed or top-ranked pages.  This is not a new issue for the publisher or advertisers who participate in paid search placement, and was highlighted by the FTC in a 2002 letter responding to Commercial Alert’s complaint against search engine companies alleging that consumers were misled to believe that search results are based on relevancy or actual page clicks, when they were really based on paid placement.  The FTC declined to take action against the companies then, but issued warning letters recommending that search engine companies ensure that paid search results are clearly and conspicuously disclosed to consumers.

The Way I See It

• I see publishers, content creators, blogs, advertisers, and agencies beginning to pay more attention to the business and legal issues surrounding native advertising, with an emphasis on more clear disclosure that native ads are paid content while striving to retain the organic, seamless qualities that make native advertising effective.
• Many publishers will, like The Atlantic recently did after a negative reaction from its readers to a native blog post sponsored by the Church of Scientology, revise their editorial guidelines focused on how native advertising will be formatted, styled, and disclosed.
• I see formats for native advertising becoming standardized as central media buying platforms evolve and media and creative agencies further embrace the many types of native content available.  One challenge advertisers will face will be drilling down on measurement of consumer engagement and ROI on the levels of both brand loyalty and purchasing.
• An October 2012 poll conducted by MediaBrix found that 57% of viewers of native ads on Facebook, 66% of viewers of print advertorials, and 86% of viewers of online video ads that appeared to be entertainment content found them to be misleading.  I see regulators eventually weighing in, as the FTC did in 2002, on current and new native advertising formats and platforms to apply traditional principles of marketing law such as clear and conspicuous disclosure and non-deception.