Advertisers “kinda-sorta” go along with FTC guidelines for labeling of native advertising placements.

In an effort to ensure that readers understand when published news stories represent “earned” rather than “unearned” media, in late 2015 the Federal Trade Commission established some pretty clear guidelines for news stories that are published for pay.

The rationale behind the guidelines is that the FTC wants advertisers to be prevented from presenting paid content in ways that mask the fact that it’s a form of advertising.  Essentially, it wants to avoid leaving the erroneous impression that the advertiser did not create — or influence the creation — of the content, or that it paid a fee in order for the news to be published.

But what native advertising content developer Polar has found is that the explicit disclosures the FTC wishes advertisers to include as part of their stories tend to have a negative impact on readership.

… Which is precisely what native advertising is trying to avoid, of course.

After all, the whole point of these articles is to appear that they’re published due to their inherent newsworthiness, rather than because advertisers wish to push a sales message disguised as “narrative” so strongly, they’re willing to fork over big bucks for the privilege.

In its evaluation, Polar analyzed ~140 native placements across 65 publishers, and found that only ~55% of them used the term “sponsored” as a way to label the content.

As for the term “advertisement” or “advertorial,” the incidence of usage was far lower; less than 5% of the native placements identified their content as such.

Correlated to these findings was that more euphemistic terms like “partner content” tend to perform better in terms of reader engagement than do more explicit disclosures of an advertiser relationship.

“Promoted” was found to be the best performing term, garnering a 0.19% clickthrough rate as compared to “sponsored,” with just a 0.16% clickthrough rate.

[Interestingly, on desktop devices “sponsored” marginal outperformed “promoted,” whereas on mobile devices it was just the opposite.]

More broadly, the Polar investigation also found that nearly one-third of the pay-to-play native advertising placements it evaluated failed to comply at all with the FTC guidelines (as in zip/zero/nada) – which brings up a whole other set of issues at a time of heightened awareness of the “fake news” phenomenon online.

The Free Lunch Ends on Facebook

Promoted posts on Facebook is the only way to get exposure anymore.
Promoted posts are the only way to ensure decent exposure on Facebook now.

It had to happen.  Suffering from a raft of unflattering news stories about its inability to monetize the Facebook business model and under withering criticism from investors whose post-IPO stock price has been battered, Facebook has been rolling out new policies aimed at redressing the situation.

The result?  No longer can companies or organizations utilize Facebook as a way to advance their brand “on the cheap.”

Under a program that began rolling out this summer and has snowballed in recent months, businesses must pay Facebook anywhere from a fiver to triple figures to “promote” each of their posts to the people who have “liked” their pages plus the friends of those users.

And woe to the company that doesn’t choose to play along or “pay along” … because the average percentage of fans who sees any given non-promoted post has plummeted to … just 16%, according to digital marketing intelligence firm comScore.

Facebook views this as a pretty significant play, because its research shows that Facebook friends rarely visit a brand’s Facebook page on a proactive basis. 

Instead, the vast degree of interaction with brands on Facebook comes from viewing newsfeed posts that appear on a user’s own Facebook wall.

What this means is that the effort that goes into creating a brand page on Facebook, along with a stream of compelling content, is pretty much wasted if abrand isn’t  willing to spend the bucks to “buy”exposure on other pages.

So the new situation in an ever-changing environment boils down to this:

  • Company or brand pages on Facebook are (still) free to create.  
  • To increase reach, companies undertake to juice the volume of “likes” and “fans” through coupons, sweepstakes, contests and other schemes that cost money.
  • And now, companies must spend more money to “promote” their updates on their fan’s own wall pages.  Otherwise, only a fraction of them will ever see them.

Something else seems clear as well:  The promotion dollars are becoming serious money

Even for a local or regional supplier of products or services that wishes to promote its brand to its fan base, a yearly budget of $5,000 to $10,000 is likely what’s required take to generate an meaningful degree of exposure.

Many small businesses were attracted to Facebook initially because of its free platform and potential reach to many people.  Some use Facebook as their de facto web presence and haven’t even bothered to build their own proprietary websites.

So the latest moves by Facebook come as a pretty big dash of cold water.  It’s particularly tough for smaller businesses, where a $10,000 or $20,000 advertising investment is a major budget item, not a blip on the marketing radar screen.

What’s the alternative?  Alas, pretty much all of the other important social platforms have wised up, it seems. 

For those businesses who may wish to scout around for other places in cyberspace where they can piggyback their marketing efforts on a free platform, they won’t find all that much out there anymore.  Everyone seems to be busily implementing “pay-to-play” schemes as well.

FourSquare now has “promoted updates” in which businesses pay to be listed higher in search results on its mobile app.  And LinkedIn has an entire suite of “pay-for” options for promoting companies and brands to target audiences.

It’s clearly a new world in the social sphere … but one that reverts back to the traditional advertising monetary model:  “How much money do you have to spend?”