- Research from MediaRadar made available to Marketing Dive on thousands of native ads from 12,965 brands found that 37% of publisher websites were not compliant with Federal Trade Commission guidelines.
- The FTC guidelines were released in December 2015 and at that time only 29% of publisher sites were compliant so while non-compliance is still high, the number of compliant websites increased 119% year-over-year.
- The report also found that demand and adoption for native ads continues to rise with 610 new advertisers on average adopting the format each month. Advertisers are purchasing native ad units as part of digital packages rather than via standalone campaigns which drives better revenue for publishers, per Todd Krizelman, CEO and co-founder of MediaRadar.
Native advertising has been seen as a way forward for advertising on publishers’ websites at a time when ad blocking software adoption continues to rise and traditional digital formats such as display and banner ads are ignored or seen as contributing to a poor user experience. The challenge with native ads is because they are designed to mimic editorial content, the FTC guidelines stipulate how the ads are disclosed as paid to ensure website visitors understand the difference between ad and editorial content.
A lot of native advertising is done via influencer marketing campaigns and last year the FTC announced it would become more stringent in enforcing its disclosure guidelines for influencer campaigns. Brands like Warner Bros. and Lord & Taylor were sanctioned in 2016 for social media campaigns that didn’t meet disclosure requirements.
Overall native advertising is still in its early stages and renewal rates are low at 33% across all media websites and average campaigns run for only two months. One bright spot was with publisher sites with more established native programs, such as sites with more than 50 brands buying native units, recording a renewal rate of 49%, according to MediaRadar. By category, media and entertainment led all others in native advertising by more than one-third.