According to a new study, roughly 70 percent of websites are not compliant with the Federal Trade Commission's recently released native advertising guidelines.
Last December the agency issued Native Advertising: A Guide for Businesses, in which it stated that consumers must be able to quickly and easily distinguish sponsored content from content that is independentlycreated and produced. The FTC provided detailed recommendations as to how the necessary disclaimers must appear so that consumers know before they choose to view a native ad that it is commercial in nature. Ads that fail to do so are presumptively deceptive, the agency said.
To gauge compliance over the last few months, MediaRadar reviewed thousands of native ads and found that just 33 percent of publishers are currently labeling them in compliance with the FTC's guidance. Roughly 12 percent of the ads contained no label at all.
For those publishers that did label native ads, 54 percent used the term "sponsor" or "sponsored." Other popular terminology included "promoted," found on about 12 percent of the ads, and the word "ad" itself, used on approximately 5 percent of the sites. Less than 5 percent contained phrases such as "brought to you by," "partner content," or "content by."
Even publishers that applied a label failed to achieve compliance, because often the labels were either in the wrong place or were too subtle to be noticed by consumers, MediaRadar found.
The study also considered which industries favor native advertising. While the use of such ads is growing in general, the apparel and accessories category increased the most (up 82 percent from 2014 to 2015), followed by financial and real estate, food, and retail and travel, all with about 30 percent more native ads over the prior year.
"One of the reasons native is so fascinating is because it means many different things to publishers," according to the report. It noted that it tracked "almost 40 different implementation styles. Some are clearly identified, but others are extremely difficult to know that they were sponsored in any way."
Why it matters: The study demonstrates that advertisers are still struggling to achieve compliance with the FTC guidelines released little more than three months ago. However, the agency has already taken enforcement action, settling a case with Lord & Taylor. The department store chain launched an advertising campaign to promote its private-label clothing brand, using branded blog posts, photos, video uploads, native advertising editorials in online fashion magazines, and online endorsements by a team of specially selected "fashion influencers." The FTC said the company failed to disclose that the native articles and posts were paid commercial content and the fashion influencers failed to disclose they had been paid by Lord & Taylor and received free product.