How Advertisers and Publishers Should Deal with the Ethics of Native

Mar 14, 2017

Yet another study finds that publishers aren’t complying with FTC guidelines on native advertising, which leads me to ask, “Why?”

To answer this question, one must first address the relationship between law, self-regulation and ethics, specifically as it relates to native content.

Advertisers aren’t entirely entitled to free speech. In fact, commercial speech is one of the least-protected forms of speech protected by the United States’ First Amendment. Regarding advertising specifically, the Federal Trade Commission sets guidelines and governs how and what we can say about legal products.

Native advertising, with its billion-dollar revenue potential, estimated to reach $25 billion in 2018 according to BusinessInsider, is primarily occurring online and, therefore, hard to regulate.

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Publishers and their advertisers, and the agencies that represent them, aren’t complying, in part, because the opportunity exists. And we also must consider how the FTC operates: in response to complaints related to truthfulness and the misleading nature of advertising.

2 types of complaints against advertising

Two avenues drive complaints against advertising: advocacy groups concerned for vulnerable audiences (e.g., Mothers Against Drunk Driving (MADD) monitoring alcohol advertising reaching underage youth) and competitors trying to ensure a fair marketplace (e.g., see Pizza Hut vs. Papa Johns).

Organizations related to various causes, such as MADD noted above and those engaged with the industry such as the Interactive Advertising Bureau, also serve a self-regulatory role by guiding marketers, advertisers and their agencies with best practices, thus avoiding the timely and costly impact of lawsuits.

The ethics of native advertising must consider the audience reached

Still, the FTC’s guidelines along with self-regulatory organizations aren’t enough. Why? Because the regulation of native advertising is based upon the notion that content is misleading.

To perceive native advertising as misleading, is to perceive the moral qualities inherent in the practice and, therefore, to perceive the resulting consequences as unjust. For the nature of native advertising is about more than the paid, strategic content and the disclosure of that content.

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The ethics of native advertising must consider the audience reached. Perceiving native advertising as misleading suggests that the audience is a free and autonomous agent capable of making his/her own rational decisions based upon truthful information. Morally speaking, truthful communication maintains an equitable or level playing field between the sender and receiver.

Furthermore, when using ethics to guide our decision-making, we think about our audience as worthy of dignity and respect, thus giving them the information necessary to make their own decisions. The alternative is treating the audience as a means to our own profit-motivated ends, enticing the use of misleading tactics.

The law is our baseline

As advertisers, and the agencies that represent them, the law is our baseline, our minimum effort, supplemented by self-regulation to hold the organizations of the advertising industry accountable to the law. Our maximum goal of doing what is right is ethics.

Ethics is intertwined with something much more complex: the organization

We often think about ethics as a perception, an awareness, or in terms of an issue or problem-solving. When moral awareness is lacking in advertising, we talk about moral myopia, which is the inability to perceive a problem as ethical, and we discuss why it and subsequent unethical decision-making occurs.

However, ethics is intertwined with something much more complex: the organization.

Organizational intentions, leadership, and values serve as foundation and motivation when confronted with an ethical dilemma, such as how to prominently and clearly label native advertising and when to comply with the FTC’s guidelines for native advertising.

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Organizational culture defines a sense of style and values for an organization that serve as a frame of reference for members when faced with achieving goals and overcoming challenges, including ethical challenges related to creating and placing native content.

An organizational leader is the first individual responsible for defining values and setting goals, which are taught to new members through the process of socialization. Regarding ethics, these values might be represented in a code of ethics that are used to train and test new employees and then serve as a guide throughout their employment.

Recommendations for addressing the ethics of native

Employees are internal members, but an organization is also comprised of external stakeholders that impact and are impacted by culture, which would include the advertiser’s agency, media vendors such as publishers and other service providers.

The following are a few organizational considerations that impact ethical decision making in advertising as well as recommendations for addressing the misleading nature of native advertising.

Leaders set an example for others

1. Leadership
Leaders develop the organization’s mission and values and set an example for others.

Leaders, through clear and accessible communication, set an example for others. And the values, both personal and organizational, that guide them are not static but changing. Therefore, a leader might ask:

1. Am I current on the trends of the industry and have I shared my perception of the ethical implications of these practices?

2. Have I, along with my employees, evaluated the extent to which these practices align with our organization’s mission and values?

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2. Socialization
Socialization is the process of teaching new members the correct way to think and feel about the organization, including how to achieve goals and overcome challenges.

While socialization can happen implicitly over time, there are several formal processes that impact the process. Those related to ethics include:

1. Ethical codes. Does the organization have a formal position on ethics? Does the organization have a formal position on native advertising? Do employees have access to these codes and best practices?

2. Communication. How often do members meet to discuss the ethical implications of emerging practices? Do these meetings include discussions related to ethical problem-solving?

3. Values. When and how often are the organization’s values shared with employees? Do these values come up in discussions related to business practices? How do these values aid in discussions of ethical problem-solving?

4. Rewarded practices. Are people who project strong or weak ethics lauded or censored?

3. External influence
Organizations are comprised of internal members and influenced by external members.

The advertising process is complex due to the many players involved. An advertiser, with its various stakeholders (e.g., employees, shareholders, community, public) works with an agency who places media with a publisher on its behalf. While it might be ideal to consider ethics a unilateral, internal decision, it’s instead impacted by the various roles involved in the ever-changing and multifaceted marketing communications relationship. Therefore, when pursuing and securing a partnership, an advertiser might ask:

1. Do our organization’s, the agency’s and publisher’s mission and values align?

2. Do members of our organization, the agency’s and the publisher’s perceive an audience as free and autonomous, therefore circumventing opportunities for deception and manipulation?

These are just a few considerations for an advertiser and their agency to review when grappling with the ethical nature of native advertising.

Without consideration for the organizational impact on ethical decision-making, we can guarantee to falter when faced with an ethical challenge

Are these measures foolproof? No. But without consideration for the organizational impact on ethical decision-making, we can guarantee to falter when faced with an ethical or even a legal challenge. With these considerations, we heighten our awareness of when a dilemma is faced, which allows us to interpret the moral qualities of the situation, have a dialogue with affected members, and come to a solution that is fair and just.

These recommendations heighten the importance of ethics in our day-to-day communication and business practices. So, you might be asking, “Does an ethical priority cause us to deviate from business intentions in a capitalistic society?”

Companies such as Whole Foods and Patagonia seem to be experiencing enduring success, which would suggest ethical consciousness (or what John Mackey calls conscious capitalism) is good for business.

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Story by Erin Schauster

Assistant Professor, University of Colorado Boulder Colorado, US

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