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Native Advertising: An Explainer

Since 2013, native advertising has been at the center of talks in advertisement innovation. It is now commonplace among news and social media web sites, notably making up 83% of Facebook ads.

This article will define native advertising in its two main forms and discuss its current regulation in Australia.

What is Native Advertising?

Native advertising is, in essence, paid content which blends in among online platforms. This content is usually engaging and can be interactive.

We’ve seen this form of advertising before: ‘advertorials’ (advert + editorial content) in print newspapers and magazines. Advertorials match the look and format of an article and, effectively, appear to form part of the newspaper or magazine. Native advertising basically translates this into an online environment.

Suited to an Online Environment

The Internet’s simultaneous provision of advertising possibilities and (limited) user control presents an issue. Social media allows cheap promotion to large amounts of users, but can easily be avoided by unfollowing the source.

As a result, native advertising delivers advertisements in a more palatable way to dissuade users from leaving. In practice, it encourages creating engaging content in addition to its promotion of products or services.

A Double-Edged Sword

Despite native advertising’s original motivations, consumer complaints are only increasing. The term ‘native advertising’ has broadened to encompass advertisements which attempt to mask their nature.

For instance, the infamous article that popularised native advertising was when the Atlantic published an article on their website celebrating Scientology’s milestone year. The only indication of the article’s use as an advertisement was a yellow ‘sponsor content’ label above the title of the article.

Furthermore, some content receives payment for their creation without being labelled as paid-content. The success of native advertising requires the trust of consumers, which will only reduce as some advertisers exploit its camouflaging properties.

Is Native Advertising Regulated in Australia?

The Australian Competition and Consumer Commission’s Digital platforms inquiry is currently ongoing, so the Commission’s specific view on this form of advertising is pending.

Learn more about the ACCC’s inquiry in How the ACCC Could Change How We See News on Facebook and Google.

However, the obstacle to native advertising appears to be the prohibition on conduct that is likely to mislead or deceive in the Competition and Consumer Act 2010 (Cth).

Misleading or Deceptive?

The ACCC states that it’s necessary to consider whether the overall impression of the advertisement is ‘false or innacurate’.

It’s unlikely that advertisements similar to The Atlantic article would pass this test; a small label does not constitute an ‘overall impression’.

Learn more about how to identify this conduct in What Is False And Misleading Advertising?

Code of Ethics

The AANA Code of Ethics establishes advertising principles for ‘legal, decent, honest and truthful’ native advertising. The principles state that advertising should display:

  • prominently visible cues to let the user know they are viewing ‘paid-for marketing content that is not editorially independent’; and
  • obvious labels demonstrating a ‘commercial arrangement is in place’.

This code is not enforceable, but it serves as a guide for advertisers in alleviating concerns regarding native advertisements and ensuring consumer trust in their brand.

Conclusion

Ultimately, native advertising can be an effective way to engage consumers through the delivery of creative, fun and/or interactive adverts.

In spite of these positives, native advertising refers to a variety of different forms of advertising, including adverts intending to mislead and decieve consumers.

Regulation has not yet fully developed in this area. The current Australian Consumer Laws on misleading and deceptive conduct as well as the AANA Code of Ethics serve as guidelines for the responsible delivery of advertisements, but enforcement may be required to prevent large scale abuse.

Currently, only a few platforms with the scale and data access to offer native advertising, but as alternatives are offered and the market continues to grow, the occurrence of native advertising practices can be expected to compound.

Unsure where to start? Contact a LawPath consultant on 1800 529 728 to learn more about customising legal documents and obtaining a fixed-fee quote from  Australia’s largest legal marketplace.

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