Financial Resource Center

Fraud


How to Spot Advertising in Disguise

by Rena Crispin, CUDE, CCUFC / February 1st, 2016

Blurring boundaries between independent and paid media have entered our cultural vernacular. This overlap affects the publications that we read every day—and, as a result, our perceptions as consumers.

What is native advertising?

Traditional advertorials, or sponsored articles in print publications like newspapers and magazines, have been around for a long time.

But as media companies shift focus to an online presence, the advertorial has evolved into native advertising: sponsored content that blends seamlessly with the editorial design and tone of a publication’s website.

The majority of publishers and media companies offer some kind of native advertising program, according to a report by Hexagram, a technology company in London that offers native-advertising solutions to brands.

Since most consumers are familiar with clickable banner ads that are so prevalent on the Web, we tend to ignore them—which is bad news for advertisers. Native advertising comes into play as a direct result of those ineffective banner ads.

Look for fine print at the top or bottom of stories online; this can serve as a warning flag.

The reason we click

You've probably experienced clicking through to native advertisements because you didn't realize you were clicking on an ad.

When we’re looking at a publication, our general assumption is that we’re getting independent, objective information. And that’s the real crux of it. Advertisers want to blur that line.

Some native ads are clearly labeled, but once you click through the story is laid out like any other other story would be.

Native advertising also can throw consumers off because brands have created so many different names for the practice. “The nomenclature with regard to native advertising is all over the board,” says Patten. “You hear advertorial, sponsored story, branded journalism, you name it. That’s one of the reasons consumers are so confused about what is and isn’t an ad.”

Verbiage like "sponsored by," "suggested post," or "featured partner," is a giveaway that what you're reading is a native advertisement.

How to identify a native ad

With regard to paid content, the Federal Trade Commission (FTC) requires transparency from online publishers. If a publisher includes an ad in its content, it must clearly and conspicuously disclose that information.

However, native advertising employs strategies that still can make it hard for consumers to tell they’re reading sponsored content. They might put disclosures in fine print, make it smaller, and change the color, for example.

Be on the lookout for fine print at the top or bottom of stories you read online; this can serve as a warning flag.

Some native advertisements do feature more prominent distinctions, such as wraparound branding with the sponsor’s logo displayed. But obvious forms of native advertising have become the exception and not the rule.

Consumers click through to native advertisements because they don't realize they're clicking on an ad.

The debate continues

As the use of native advertising grows, the FTC has taken steps to analyze the practice and its effect on consumers. In early 2016, they issued an enforcement policy statement  that basically tells advertisers that the days of playing fast and easy in native advertising are over.

These two organizations that help you keep tabs on the latest native advertisements and other forms of misleading advertising:

  • Truth in Advertising is a  nonprofit organization whose mission is to be the go-to online resource dedicated to empowering consumers to protect themselves and one another against false advertising and deceptive marketing.
  • The Native Advertising Playbook develops technical standards and best practices and fields critical research on interactive advertising, while also educating brands, agencies, and the wider business community on the importance of digital marketing.
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