Truth in Advertising Has Come Full Circle. What’s Next?
The Federal Trade Commission states that “truth in advertising is important in all media, whether they have been around for decades (like television and magazines) or are relatively new (like blogs and social media).” (Source: FTC) Yet as the lines between advertising, sponsorship and endorsement continue to blur, consumer expectations now demand something greater than truth: transparency.
Consider that before social media, people primarily got their information from a combination of TV, newspapers, magazines and radio. These media outlets took time to produce content, as did the advertisers that ran ads with them. TV commercials were king, reaching millions of people, and brands spent significant time and money to ensure their commercials were perfect. When cable TV entered the marketplace, it blew the doors open for smaller businesses to advertise locally and at relatively nominal cost. While the creative behind commercials suffered, they were still produced well in advance of airing.
More importantly, demarcation between advertising and news or entertainment programming was clear, regardless of the form of media in which ads appeared. Ads appeared during commercial breaks, between programs or on separate printed pages. Outside of the evening news, the closest thing to real-time content was DJ on-air reads that always included “sponsored by” language.
As advertising shifted to digital and social, real-time became a real thing. In social media alone, over 4 million status updates, tweets, pictures, and videos are posted every single minute. (Source: MarTech.) Inclusive of time spent multi-tasking, adults in the U.S. now spend an average of over 12 hours per day consuming media. (Source: EMarketer.) Knowing the true source of content has become nearly impossible, and often irrelevant.
This collision of content and consumption is staggering, and leaves brands in a tricky place. “92% of people [now] trust recommendations from individuals (even if they don’t know them) over brands.” (Source: Nielsen.) So as consumers’ trust and focus has shifted to friends, influencers, and social media stars, brands have shifted marketing dollars to influencers in order to promote and sell their goods and services. Unlike in the pre-digital days, paid promotion has generally lacked transparency, often leaving consumers unaware that people they think are impartial users of products are actually being paid to promote them.
Yet consumers have gradually adopted an expectation of radical transparency; they want to know what actually matters to the Insta-famous, versus what companies are paying them to promote. Now, not only are customers demanding that marketers clearly identify when people are paid for an ad campaign, but the FTC has launched a probe into sponsored posts and non-compliant activity. (Source: Forbes). This demand for transparency has led social media networks to change the way they handle sponsored content. In March, Facebook instituted a new policy requiring branded content be published through a tool that marks it as a “paid” post. Similarly, in August, Instagram instituted a new policy requiring branded content be published with their tool that identifies a post is “in paid partnership with” a company. So it seems we’ve come full circle, and perhaps soon everyone will know when an ad is an ad again.
When this renewed transparency in advertising is coupled with micro-level influencers whose authenticity is central to their own brand value, a meaningful power shift occurs. Now, a brand’s ability to pay talent cedes way to the authenticity of the relationship between brand and endorser, which means that the match between brand DNA and influencer preferences is the central requirement for a strong and influential partnership. With that in mind, what now happens to a brand whose value to consumers’ has been driven not by real utility but deep pocketed media spending?
