Publishers & Advertisers Must Regulate Native Ads -- Or Else Be Stifled by FTC
In recent weeks, the Federal Trade Commission issued a new set of guidelines for native advertising that has publishers and advertisers alike stirring. One thing that’s important to keep in mind as we learn more about the FTC’s plans to implement and police these guidelines in the coming months, is that industry coordination and innovative thinking have the power to trump government regulation. Considering that native advertising is both key to lowering publishers’ content creation costs and an important revenue stream, as well as a powerful tool for brand marketers to connect with consumers in a crowded digital advertising marketplace, it’s now more important than ever for industry players to take control of their own fate.
I know I am not alone when I say that I’m flatly opposed to government regulation of the native advertising space. I believe this can best be accomplished through the industry’s own self-regulation, by the Interactive Advertising Bureau (IAB) working with publishers, agencies, and brand marketers to find a mutually agreeable solution. Government regulation will only stifle innovation at a time when new ideas are needed by all parties to connect with consumers.
I strongly encourage the IAB, with the support of publishers and advertisers, to take a proactive, aggressive stance to ensure there is a common set of standards used to protect consumers regarding the use of native advertising, particularly in the areas of hard news, healthcare, and pharmaceuticals. Based on my 20 years of financial industry experience, it’s clear that the best regulation is industry-led self-regulation. If high quality, self-imposed standards do not become the norm and consumer groups are able to point to real situations where people have been hurt, history tells us that the government will step in. And who wants that?
I don’t think content strategies will -- or should -- change based on these new FTC guidelines as it’s clear that native advertising is very lucrative for publishers and very effective for brands, especially in a mobile environment where banners and pop ups no longer resonate with -- and even annoy -- consumers. The key for all parties is to establish and maintain trust with their audiences. Many native advertisements provide significant value to consumers, so it’s clear that publishers and marketers need to work together to innovate, maximizing that benefit and minimizing their distrust to improve their overall user experience. Just look at the value created for the consumer, content creator, and advertiser in the physical and digital product placement business in television, film, and video games. Logical and effective use of native ads only serves to enhance the consumer experience.
My advice to the IAB and its members is to be innovative and be bold. This is a real issue and you are in the best position to ensure this relatively new advertising medium’s success.
Scott Singer is a Managing Director at DDG Inc., a boutique innovation consultancy. He's a digital transformation, strategy & business development expert and has worked extensively with digital publishers in the news, entertainment, lifestyle, sports and finance sectors.