When is an ad not an ad? The problem of disclosure online

  • Author: Lauren
  • Lauren Fisher,

I recently read about a case concerning the FTC and Ashton Kutcher, regarding promotion of products he had invested in, when he guest-edited an online version of Details Magazine. The magazine covered many tech companies that Kutcher was officially involved with, yet the magazine contained no disclosure of the fact, nor was it personally promoted by Kutcher himself through his many social media profiles, such as to his 7 million + followers on Twitter. Given that the FTC has been particularly hot on online disclosure in recent months, paying particular attention to blogger endorsements, the outcome of this is surprising and it seems that it is one rule for one and another rule for others. It brings up the question of what is considered an advert online and the role of responsibility to users to let them know that what they're seeing is an ad, or a paid-for endorsement. It's becoming less clear what is advertising and what is organic content, with a divide in knowledge among those consumers that are more socially savvy, and those that aren't.

Do we even recognise ads any more?

I started a discussion about the issue of tracking people online, and whether the outcome of increasingly relevant ads being served to us on social sites was perceived as a benefit. One commenter explained that he was becoming desensitized to online advertising, as he had developed an understanding of what was paid for content and what wasn't. The issue is however, that while we may be becoming more adept at spotting online advertising where we expect to find it, it is increasingly popping up in new places, where it looks less and less like advertising and more like organic content. It's one thing for consumers to become desensitized to online adverising, but what about when you're reading an article about a tech company and that publication's editor had invested in that company? This is, in my understanding, nothing other than advertising or advertorial although it may not look like it, or been disclaimed as such.

As social media develops, advertising has an increasingly larger role to play as it becomes essential to the continuation of these free platforms. If the ads are to be successful and drive results for the brand, it is in the social networks' best interest to make these ads as much a part of the organic process as possible, instead of just placing them in the normal spots you'd expect to find banner ads. They need to take different forms to benefit from the particulars of social networks and how they operate. This can even be seen in the likes of Facebook, who have, in fairness, always been incredibly transparent about advertising on their site - with ads taking up the same spot on the right hand side and following the same format. But then they introduced sponsored stories, which look less like an ad and more like an organic story that would usually pop up in your newsfeed. And the outcome of this looking less like an ad, is that it is one of the best solutions for advertisers on the site, as it can drive incredibly positive results.

Evidence of this can be seen in the click through rate for sponsored stories on Facebook, compared to standard ads :

The simple fact is that when an ad doesn't look like an ad, the results are better for the brand. This has always been the case in advertising, it's not new or unique to social media. That's why formats such as the advertorial developed ; advertisers wanted to catch users in a new way, to publishers developed a format that looked like an article but it was actually paid for, and this is always disclosed at the top of the article itself. But with social media this disclosure is becoming less apparent. The question is do people care, or are we happy to consume this sponsored content if it improves or adds something to our online experience?

In action - Dunkin Donuts

Showing just how pervasive alternative forms of social advertising are becoming, the Sims has only been announced as launching on Facebook days ago by Electronic Arts, yet the advertising efforts are already in full swing. Dunkin' Donuts will be one of the first advertisers on 'Sims Social' where their products will be available as virtual goods. This is far beyond advertising in gaming such as billboards etc.. and Dunkin' Donuts will enhance the game play experience, as players will be able to give a 'Dunkin' Donuts coffee boost' once a month to one of their Sims Social friends. This is far from advertising in the traditional sense, but again, do people really mind that they're effectively being sold to if the game play becomes more fun and they actually get something out of it?

The issue comes with the split of knowledge that I touched on earlier. Some people know that they're being advertised to and are able to adjust their experience of the ad or the sponsored promotion accordingly, not allowing themselves to be subliminally sold to. But others aren't able to exercise this same degree of control as they have a different understanding to online sponsorship. As advertising breaks out of the comfortable moulds that we knew it sat in - the breaks in between TV programmes, the huge billboards beaming down at us, the flashing banner on a website, it becomes more difficult to spot advertising. And with that comes a certain amount of loss of control over the impact the brand has on you and how you choose to consume the message.

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