Native Advertising Meets the FTC

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Native Advertising Meets the FTC


The Federal Trade Commission has published new enforcement guidelines for so-called “native advertising”.

“Native advertising” looks like news, product reviews, entertainment, or other material that surrounds it online, but is in fact paid advertising. It presents challenging enforcement problems from a truth-in-advertising perspective precisely because it is not obvious to the reader that it is advertising-often containing only a single “sponsored by” or “promoted post” notation.

Existing FTC guidelines require both that the content of advertising be truthful and that the context of advertising be truthful. When it comes to native advertising, the new FTC enforcement guidelines contain some fairly specific guidelines about how to accomplish that objective.

For example, a native advertisement for athletic shoes that appears on a web site featuring financial information would likely be sufficiently clearly advertising to eliminate the need for disclosure of its sponsored nature.

On the other hand, an advertisement for those same shoes, or for other fitness related items, on a web site that focuses on wellness issues requires a clear and prominent disclosure in the ad itself, and in the content to which the ad leads, that it is in fact an advertisement.

Industry reaction to this point has been muted, but somewhat concerned. According to Ad Age, the Interactive Advertising Bureau, a prominent trade association of digital advertising publishers, expressed an appreciation for the FTC’s effort to provide some guidance, while also expressing reservations about the likelihood that the very specificity of the recommendations would make for clunky creative, and potentially create technical issues.

The FTC Guides contain no additional information regarding whether enforcement efforts in this area are likely to increase, nor do they contain any guidance regarding how severe a failure to comply must be in order to attract an enforcement action.

By Kevin Haley

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