Meta has started tests to modify the transparency labels on ads on Instagram and Facebook, changing the old Sponsored label to Ad. This update is part of a general overhaul of the company’s applications and could significantly impact ad performance.
From Sponsored to Ad
The new label, which aims to provide a cleaner and simpler experience for users, will likely make it harder for consumers to clearly identify ads while browsing their feeds. By reducing the visual cues that typically indicate paid content, this change could make ads feel more like organic content, which in turn could increase user engagement.
However, this alteration also raises questions about users’ ability to distinguish commercial content in real time. This aspect is especially relevant given that, according to data from Bazaarvoice, more than a third of consumers over 18 prefer clear disclosure tools, such as paid partnership labels.
The change has caught the attention of regulators such as the European Commission, which has already investigated Meta’s advertising practices in the context of increasing scrutiny. The EC has raised concerns about the company’s pay or consent model under the Digital Markets Act, and this new approach could be considered a misleading interface design under the EU Digital Services Act, especially if users cannot easily recognize sponsored content.
For marketers, this change presents both opportunities and challenges. While it could benefit advertising performance by making paid content less obvious, companies must closely monitor regulatory developments and avoid creating content that blurs the lines between ads and organic posts. In the event of regulatory intervention, this modification could be reversed or altered, creating inconsistencies between markets and complicating campaign planning.