The list of gadgets that have been replaced by the smartphone is stunningly long—and growing. Camera, camcorder, music player, GPS unit, scanner, voice recorder, radio, Game Boy. Who buys those anymore, now that a single phone can get the job done?
But small electronics aren't the only entities being displaced in the mobile revolution. Media channels, including newspapers, magazines and television shows, are also suffering. Even Web surfing on our regular computers is taking a hit, as we do more and more of our Internetting on phones and tablets.
So who cares if people watch less regular TV, read fewer printed publications and spend less time on the full-sized Web?
I'll tell you who: advertisers. With all the traditional channels shrinking, how are advertisers supposed to reach customers? Banner ads on our devices are ugly and intrusive.
There are other ways to advertise to an on-the-go digital audience. You can display a full-screen ad while a Web page or app is loading. You can send texts (with permission, of course). And as the mobile era matures, we'll see more product placement in games, free apps (brought to you by sponsors) and ads that respond to your current location. So far, though, advertisers and brands aren't doing much in these realms; they're wary of the technical challenges, haven't studied the effectiveness and don't want to infuriate potential customers.
To overcome these various digital hurdles, the ad industry has been serving up a sneaky solution: make ads look less like ads—and more like the articles, videos and posts around them. An ad that matches the typeface, design and layout of the real articles feels less like a tacky intrusion.
This trend, called native advertising, has taken over the Internet; even the Web sites of journalistic bastions such as the New York Times and the Wall Street Journal are incorporating it. Social-media companies have signed on as well. On Facebook and Twitter, every 10th item or so is an ad; only the subtle subtitle “Sponsored,” appearing in light gray type, tells you which posts are ads.
Overall, native ads have been a huge success. On NYTimes.com, readers spend as much time on the ads as on the articles.
But what about journalistic independence? What about separation of “church and state” (ads and editorial)? Won't dressing up ads to look like reported articles mislead people?
Sometimes, yes. An Interactive Advertising Bureau study found that only 41 percent of general-news readers could tell such ads apart from real news stories.
And it's getting worse. Advertisers worry that the “Sponsored” label dissuades readers from clicking, so Web sites from NYTimes.com to BuzzFeed.com are making the labels smaller and less noticeable. Sometimes the labels disappear entirely.
At a recent panel about the difficulty of advertising in the new, small-screen world, I heard an ad executive tell an impressive story. She had gotten a musical performance—paid for by her soft drink client—seamlessly inserted into a TV awards show, without any moment of blackness before or after. “It looked just like part of the real broadcast!” she recounted happily.
But how, then, could viewers tell the ad apart from independently produced material? A fellow panelist rolled his eyes. “Oh, good grief. People are savvy. They know!” he responded.
Look, it's great that native advertising works—publications and programs and free social networks have to stay solvent somehow. But if advertisers truly believe in their material, they should have no problem labeling it as advertising. (“Sponsored post” is already a little vague; “From around the Web” and “More news you may like” are downright deceptive.)
For now native ads will remain all the rage—with no laws governing them and no labeling standard. But that could change; the Federal Trade Commission has begun considering regulation. In other words, if the new generation of digital advertisers don't clean up their act, someone else may clean it up for them.