FTC Cracks the Whip on Native Ads | Tier10lab
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FTC Cracks the Whip on Native Ads

Madeleine Coe

At the end of December 2015, the Federal Trade Commission (FTC) released new guidelines for native advertising, as well as a revised enforcement policy statement regarding those specific advertising formats. The FTC’s policy has always been to ensure that consumers are not misled or deceived by any advertising, i.e. aware at all times what is news or entertainment content versus what is commercial content. However, the new guidelines and enforcement policy take a more explicit and assertive approach.


What Counts as Native Advertising?

Native advertising is found in digital media, in a variety of formats and could include, but is not limited to: written narratives such as blogs or articles, videos, infographics, images and animations, in-game modules for online games, social posts, search results, email, playlists on streaming devices, and other user-generated content. Consumers encounter this content in their social newsfeeds, main pages of websites, and in Internet searches. Native advertising is any advertising that closely resembles the original content

Regardless, the FTC states that “deception occurs when an advertisement misleads reasonable consumers as to its true nature or source, including that a party other than the sponsoring advertiser is the source of a promotional message, and such misleading representation is material.”

The following formats are highly discouraged for that reason: false consumer reviews, expert opinion, news or feature article, product review, investigative report, or intimated scientific research.


Keeping your Content in Line

So, what do you need to know to ensure your produced content remains within guidelines? Basically, a native advertisement or promotional message shouldn’t suggest or imply to consumers that it’s anything other than an ad.


Here are our tips:

  • Content needs to be distinguishable from non-advertising content from first contact with a customer.
    Use plain language labels to indicate commercial content on the publishing site like “Partner Content” or “Promoted Post”. Social media sites like Twitter and Facebook will automatically label social media advertising posts as such.
  • If a disclosure is necessary, it should be prominent and featured as close to the claim as possible.
  • No deceptive “door-openers”. You cannot mislead a customer to get them to click the link, so the link preview and description need to be apparent as commercial content—a disclosure once through the link is not sufficient.
  • If content is obviously commercial i.e. “Test Drive a New Honda today”, no disclaimer will likely be required.
  • Similarly, product placement without a specific product claim made is typically safe without disclosure as it is obviously commercial.
  • The more similar in appearance and style that your content is to non-advertising content is on the publishing site, the more likely a disclaimer will be required.
  • Check in with your state advertising guidelines as well.

The key is to prevent potential deception. If a consumer cannot trust your advertising content, then why would they trust you as a customer?

Here’s John Oliver on why native advertising needs to be more explicit about it’s commercial messaging:

The Future of Digital Media

The Interactive Advertising Bureau (IAB) will discuss the new FTC guidelines at a closed-door meeting of the IAB Native Advertising Task Force on January 5. The meeting could lead to lobbying efforts against the new guidelines for fear that it may effect the efficacy of commercial content produced for online advertising. The new enforcement policy will affect not only the advertiser, but also the publisher site, leading to possible court cases if the FTC determines that customers could have been misled.

The policy states,

“Everyone who participates directly or indirectly in creating or presenting native ads should make sure that ads don’t mislead consumers about their commercial nature.”

As media companies increasingly assume the role of producing their native advertising in addition to their own content, they may find themselves directly affected by the policy update.

Sources: Ad Age, FTC.gov, FTC.gov Tips & Advice

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