• by Tobi Elkin , Staff Writer @tobielkin, January 20, 2016

Native advertising and consumer trust was the topic of a panel at MediaPost’s  “The Reckoning: Trust, Transparency, Science & Accountability” conference on Tuesday.

The panel, moderated by Bob Garfield, MediaPost columnist and Co-Host of WNYC’s "On the Media," was called “Fooling the Natives: Are Content Marketing and Native Advertising Squandering User Trust In Media?”

The panel comes just a few weeks after the FTC issued guidance on native advertising, which some in the industry view as a preamble to regulation.

Garfield started with a definition of native for the purposes of the discussion: “Content provided with or for publishers, whatever its intrinsic quality, that exists to market a brand, a company or a product. The forms are diverse, ranging from 10,000-word features to listicles and slide shows."  Search, in its purest form, is native, but the panel left it to the side.

Garfield said native enjoys engagement rates that far outstrip banners. But, “as a business, how scalable and sustainable is it? If publishers weren’t desperate for a new revenue model, would we even be on the stage?” he asked.

Dan Check, Slate's vice chairman & VP, engineeering/product, took issue with the question: “We’re not desperate for a new revenue model. For the past five years, we’ve gone through a time of great upheaval and change in the media business. You have to look at what your chief asset is: your user’s trust.”

Check went to say that Slate has spent 20 years cultivating trust and wants to keep that trust intact. Their second job, though, is to make some money while they’re at it. “It only works if we can figure out ways to do native at a scale where there is enough margin to carry us through. We have to work with fewer clients and be more selective.”

It boils down to this: The rest of the advertising model is broken, and native allows enables Slate to reduce the overall volume of advertising on its site. “You can retrench with premium CPMs with native. Or, chase scale with pop-ups and higher ad density, but it’s a losing battle. We need premium CPMs, and native is the way to do that,” Check explained.

Outbrain’s Asaf Hochman, senior director, product marketing, said that for the most part, its activities fit into the standards the FTC requires. For example, it has to disclose the recommendation widget “From Around the Web.” Hochman conceded that it didn’t have an effective disclosure, but now, the widget says “Sponsored Stories” so that consumers understand it’s advertising.

Garfield noted that like a lot of people, he's rankled by insufficiently labeled advertising.

Garfield noted that pre-panel, Terri Seligman, partner in the advertising, marketing & public relations group at law firm Frankfurt Kurnit, asked, “Who cares? Why is the government intervening in something where the stakes are so low? The notion that everything a brand touches is advertising is an incorrect assumption.” That said, “It’s really important for consumers to know when there is a secret agenda and a company is trying to push one and sell a product in a stealth way,” Seligman added.

“'If I know it’s an ad, I won’t click on it,' is old thinking,” said Kevin Ryan, CEO of Motivity Marketing, Inc. “People still click on search ads -- and everywhere on search ads they’re plastered with the fact that they’re ads.”

Garfield tried to push the panel to agree that people don’t want display advertising at all. Slate’s Check didn’t agree. “Ultimately, people are finding value. The challenge for us as publishers is that we’re innovating and we’re presenting people with things that are new, and we must do it in a way that doesn’t trick people. Our duty is to make sure that consumers are clear about this before the click.”

Garfield noted that while Slate and the New York Times are “better actors” in native, that even Slate “doesn’t exactly put a big yellow flag that says ‘advertising content.’”

“We want to be clear about it without it being a warning,” Check said. Seligman agreed, adding that the “label should be accurate about what’s being presented… Disclosure is needed. Readers have a right to know. A tweet commenting on a sporting event—is that an ad?”

Garfield responded that it’s just public relations. “But if they pay to promote the tweet, it’s an ad,” Seligman added.

Outbrain's Hochman maintained content marketing is the future of marketing. “We see through post-click behavior that people want to consume content if it's valuable. And sometimes that content is going to come from a brand. “

MediaPost editor in chief Joe Mandese lobbed an issue for the panel’s consideration, commenting that “the issue is we’re going to lose meaning very quickly. My biggest concern is whether [native] is regulated or not. If editorial brands like Slate succumb to this, are they going to have any meaning any longer?”

“Yes, that’s why you need clear disclosure,” Check said. “We know how to reach people. We have insight into how to connect with readers, and we want to bring this knowledge to brands. We have the relationship with our readers -- that’s the chief value that we have. We think about it every time we label, promote and disclose…. When you lose a reader’s trust, you lose it for a really long time.”