Instagram’s New Native Advertising Feature: A Necessary Step Toward Transparency

Opinion: Instagram’s new sponsored post feature is a step in the right direction to eliminate some of the risks associated with native advertising

Native Instagram posts—those paid for by brands but posted by influencers—are about to look a bit different, and that’s a good thing.

An update introduced by Instagram earlier this month provides brands and influencers with the option to call out that posts are sponsored. Influencers can now tag brands in their posts and, if the brands confirm the relationship, the post will be marked accordingly.

The callout will appear at the top of the post (where you’d tag a location) and within Instagram Stories, noting that the content was “paid in partnership with …” This feature is a response to recent transparency issues surrounding the practice of native advertising.

Previously, there was no official way for people to distinguish between a native sponsored post and an organic one, which led to questions about the ethics behind native advertising strategies: Is native advertising potentially deceiving consumers?

The Federal Trade Commission says yes. Earlier this year, the FTC issued warnings to dozens of brands and social media influencers, including Kim Kardashian, for failure to clearly disclose their relationships with brands and products they’re promoting.

Instagram’s update is a smart move for a number of reasons. Social media plays an important role in advertising strategies, but brands need to be forthright with their tactics to win trust with consumers.

The payoff can be tremendous. According to one study, 81 percent of people said they would try a brand’s entire range of products if they were comfortable with its level of transparency, and a further 56 percent said they would be loyal to such brands for life.

The need for native

Part of the reason why Instagram released a new native ads feature (and why the FTC is paying attention to it) is that the practice is everywhere today. Brands want to generate awareness for their products and services in innovative ways beyond more conventional tactics.

While traditional advertising isn’t going anywhere any time soon, it’s valuable for brands to enter a consumer’s social network in a more organic fashion—particularly in an age where people place a great deal of trust into the opinions of their peers and social networks. In fact, a recent study found that user-generated content influences more purchases than any other form of marketing.

Given how influential a consumer’s social network can be, it’s no wonder that so many brands and advertisers have adopted the practice of native advertising. Another study predicted that native advertising will grow 156 percent by 2020.

How to maximize the effectiveness of native advertising

While native advertising can be an incredibly effective way to engage with customers on social, the practice does not come without its drawbacks

As noted, the FTC is starting to crack down on brands and influencers who fail to delineate the difference between a truly user-generated post and one that is sponsored.

What’s more, failure to offer complete transparency poses a risk to your brand’s reputation and identity that extends well beyond legal trouble. Customers don’t like feeling deceived, and distrust can have a lasting impact. In fact, 39 percent of consumers said they would switch to a new brand in the pursuit of greater product transparency.

Multiply that by the power of social, where people have a platform to amplify their dissatisfaction, and the results can be devastating.

Instagram’s new sponsored post feature is a step in the right direction to eliminate some of the risks associated with native advertising. But the most important step brands can take to maximize the effectiveness of native advertisements on Instagram is to simply identify themselves.

By making it clear that a post is actually a promotion, you will not only build trust, but you are also more likely to win loyalty for life.

Jason Nesbitt is vice president of media and agency operations at Strike Social, which harnesses the power of artificial intelligence to help advertisers succeed in paid social.