Wednesday, December 23, 2015

The Customer Experience Implications of the FTC’s New Rules on Native Advertising

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Yesterday, the FTC issued new guidance on native advertising, sponsorship, and disclosure. In some respects, the new FTC guidance contains little new. It is just another reminder that the same tenets of ethical marketing are as true today as they were more than a century ago when the Postal Act required newspapers to differentiate advertising content from editorial content. But even if the rules remain unchanged, the rapidly evolving media and advertising landscape makes it vital that marketing leaders understand and act upon the new FTC guidance.

The rise of the empowered consumer, protected by ad-skipping DVRs and adblocking software, has raised the stakes for marketers and publishers. Likewise, the disintermediation of content delivery, with peer-to-peer sharing and Facebook's news feed algorithms and Instant Articles, is upending the control that content creators once had over the distribution of information (and advertising) to consumers.

Media companies, adjusting to the loss of viewers, subscribers, and attention, have turned to native advertising to bolster revenues. And marketers, eager to overcome consumers' avoidance of advertising, have eagerly adopted approaches such as native advertising and influencer marketer. There is, of course, nothing wrong with these strategies when carefully executed, but marketing leaders must recognize that creative and innovative practices carry additional customer experience risk that must be managed to minimize regulatory, trust or reputation risks.

Where the FTC stands is clear. While the FTC blog post has a mild headline, "FTC issues Enforcement Policy Statement and business guidance on native advertising," the title of the guidance itself is less circumspect, "Enforcement Policy Statement on Deceptively Formatted Advertisements." The agency makes its intent apparent from the first sentence of the blog post: "If what looks to be an article, video, or game is really an ad – but it’s not readily identifiable to consumers as such – the FTC has another word for it: deceptive."

If you are a marketing professional, I urge you to take the time to read the Policy Statment along with the accompanying "Native Advertising: A Guide for Businesses." To read the highlights and a summary of what the new guidance means for marketing leaders, please visit my blog post on Gartner's blog for Marketing Leaders.

Friday, December 18, 2015

CX Marriage Counseling for Consumers' and Marketers' Relationship Issues

Photo Credit: Jennifer Pahlka
via Creative Commons
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We have all been in a bad relationship before.  A suitor woos us with the moon and the stars, and soon we are in the swoon of passion. Commitments are made and a honeymoon period ensues, but too quickly promises are broken. We reach out to share our needs and frustration but are left feeling emotionally abandoned. And worse yet, when we threaten to break it off, suddenly the attentive suitor is back, effusive with apologies and promises of change. And thus, the cycle continues.

Of course, I’m speaking about the state of marketing today. Marketers woo new prospects with lucrative offers not available to their loyal customers. Through careful positioning and advertising, marketers promise us the world—our internet service will be shockingly fast; our banker will give us one-to-one attention to guard our financial interests; and hot men and women will gawk in slack-jawed wonder as we pass in our new car.  But once we make the purchase and are committed to the relationship, the marketer moves on, focusing on the next prospect.

Too often, we’re left with a product that doesn’t deliver as promised--our internet service chokes while we watch a streaming movie; our bank continually adds new fees; and our car not only doesn’t cause people to gape but suffers from safety or environmental flaws. We call customer care to get some of that “customer obsessiveness” we were promised, and they refer us to the terms and conditions—that is, if someone answers the phone due to the consistently “unexpectedly high call volume.” In short, we loved the marketing, but we don’t love the experience. As the brand's commitment to us drops, so does ours for the brand, but when we threaten to switch, the marketer quickly returns with new promotions and promises. “Wait, baby, I’ve changed; it’ll be different this time!”

Consumers and Marketers currently are in a bad relationship. Consumers don’t trust marketers, with only 4% of Americans believing the marketing industry behaves with integrity, which is lower than the rating Congress earns.

To read more, please visit my new Gartner blog