Markets Wired

The Federal Trade Commission today released a staff report that summarizes agency-commissioned research from 2014-2015. The research explores consumer recognition of paid search advertising and “native advertising” that resemble news, feature articles, product reviews, entertainment, or other non-advertising online content.

The study provides insights into how consumers perceive search and native ads and how modifications to disclosures, including to disclosure language, position, text size, and color and to other visual cues such as borders and background shading, may enhance consumers’ recognition of these ads.

The study compared a test group of consumers’ reactions to ads on a series of web pages with another test group’s reactions to the same ads with modified disclosures to improve their prominence, legibility, or clarity. The study tested an equal mix of ads that consumers viewed on either a desktop computer or smartphone and measured their eye movements as they looked at the web pages.

The results of the study suggest that using some commonsense disclosure techniques like those discussed in existing FTC staff guidance to search engines and to native advertisers can greatly increase the likelihood that search and native ads are recognizable as ads to consumers.

The Commission vote approving the staff report was 2-0. (The staff contact is Laura Sullivan, Bureau of Consumer Protection, 202-326-3327)

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