Dive Brief:
- About one-third of native ads don't meet FTC guidelines for native ad disclosures, according to an analysis of 137 ad units on 65 publisher websites by native ad developer Polar.
- According to the survey, 55% of native ads were identified as "sponsored" while only 4.5% were labeled as an "advertisement."
- The report found that disclosure tags affect clickthrough rates (CTR)) for native ads, with "promoted" achieving the highest CTR at 0.19%, while "sponsored" reached 0.16% and "presented" hit only 0.12%.
Dive Insight:
In an internet landscape troubled by the rise of ad blocking, publishers and advertisers alike are turning to a growing and increasingly effective format: native ads. But while many find native ads to be effective, groups including the FTC are raising concerns over how they are presented to consumers.
The lines between sponsored and editorial content are blurring at media companies and on social media. While many native ads are properly identified, research has shown that a significant number of native ads are not disclosed as such to consumers. Research conducted by Research Now for Contently found that 48% of U.S. internet users polled reported feeling "deceived" after realizing an article or video is sponsored content.
After the FTC released its most recent guidelines on native ads last December, the agency has been aggressively policing brands for violations, especially on social media. The guidelines state that native ads must be tagged with “ad” or “sponsored advertisement” for proper disclosure.
"Regardless of the medium in which an advertising or promotional message is disseminated, deception occurs when consumers acting reasonably under the circumstances are misled about its nature or source, and such misleading impression is likely to affect their decisions or conduct regarding the advertised product or the advertising," the agency said when it released the native ad guidelines.
