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Everyone who shops online knows what happens next: Search for jackets, and the banner ads you see across the Web suddenly proliferates with them. The same sort of browser tracking is increasingly happening with native ads, which mimic the style of a site’s editorial content.
Last week, Adiant and Zemanta–two leading native advertising platforms that blend ads into McCLatchy Newspapers, the Washington Times, Hearst, the Christian Science Monitor, and ABC News, among other online publishers–announced they are joining forces to create the largest native advertising exchange on the Web, giving marketers the chance to bid in real time on billions of native ad impressions across thousands of desktop and mobile websites.
The viral potential of native ads, which generate more clicks than banner and pop-ups ads, allows advertisers to engage more directly with consumers and build their brand in creative ways. This is proving irresistible to marketers and publishers alike. And the deal between Adiant and Zemata is just one recent example of how native advertising is ramping up in scale and targeting to meet growing demand (In December, a similar deal that enabled TripleLift, a platform that blends native ads for The Atlantic, to sell its native ads across five major automated platforms, was called “a tipping point for the industry”).
But the very same quality that enables these ads to gather information for advertisers, and generates revenue for publishers–the fact that they look like stories, yet are able to track and target consumers based on their browsing histories, just like any other interest-based ad–is raising concerns about privacy and transparency in a moment when academics, policymakers, and journalists are increasingly concerned that surveillance has become the de facto state of online advertising.
“Native advertising is still advertising, and to be most efficient, native advertising needs to be seen by the most valuable people, implying a degree of targeting and therefore tracking,” said Fergus Pitt, a research fellow at the Tow Center, which is undertaking a major survey to find out how native advertising affects the credibility of news sites. “Any advertiser worth their salt is going to want detailed metrics about the effectiveness of their native ads and who saw it.”
The benefit of these new native ad partnerships is that they decouple an advertisement’s content from its formatting. Once an ad is traded, a publisher like The Atlantic is able to digest its content and reassemble it in a way that blends in with its editorial layout, creating a customized ad experience. The partnership with TripleLift has increased “our ability to administer these campaigns and manage the inventory,” David Minkin, The Atlantic‘s executive director of revenue operations, told MediaPost. “We expect the amount of business we do from native to only increase, and using this kind of functionality definitely helps us in term of achieving that scalability.”
These targeted native ads represent an improvement in terms of design, and may be more relevant or interesting to users. But that didn’t stop the Better Business Bureau’s accountability program from issuing a warning in December that companies who market products by way of native advertising must comply with the industry’s privacy code. Self-regulated by the industry, the code requires advertisers to alert consumers about online targeting by way of an icon, giving them the chance to opt out of ads that target them based on their browsing histories.
The Better Business Bureau also made a point of warning publishers that they are required to give “enhanced” notice when data about readers is being used to deliver them native ads on other sites, as when they get a sponsored ad from BuzzFeed, even if they’re on The Awl. According to a report by MediaPost, publishers have said they were not aware of the requirement, and that as recently as last fall, “the BBB faulted five website operators”–including BuzzFeed–“for failing to offer ‘enhanced’ notices about behavioral targeting. The companies all displayed online privacy policies, but didn’t have separate links devoted to behavioral advertising.”
In academic circles, the critique has been cutting.
“The self-regulatory program for advertising disclosures is a joke,” said Jonathan Meyer, a Cybersecurity Fellow at the Center for Internet and Society. “They’re tiny icons that almost nobody spots or recognizes, even by the industry’s own research. And if a consumer clicks through, they have to wade through convoluted landing pages to understand what’s happening and make a choice….It’s privacy theater, designed to thwart government action and bad press–not promote transparency and choice.”
In its annual staff report, the FTC recommended a series of “concrete steps” that companies could take to make this privacy theater more transparent, but fell short of urging congress to take legislative action, as it has in the past. Until such legislation passes, some scholars and activists fear the worst.
“We have an escalating arms race of advertisers trying to find out more and more information about who we are, who we like, what we do, in the desperate hope that we can create slightly better targeted ads, that will get a slightly better click-rate,” said Ethan Zuckerman, a media scholar, blogger, and internet activist, in a lecture last Fall at Columbia University about journalism and the normalization of online surveillance. Dependent on ads to survive, digital publishers play a role in that race. Adding necessary privacy disclosures to native ads, and making them as transparent as possible, is one way they can set themselves apart.
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