5 Key Things You Need To Know About The FTC's Guidance On Native

The Federal Trade Commission’s long-awaited guidance on native advertising came out just before Christmas, a time when everyone is distracted. Meanwhile, publishers and marketers are still mulling it over, considering what it means for them. We'll explore this issue more in coming weeks.

As my colleague Eric Sass reported in a recent column, consumers continue to have trouble distinguishing native advertising from editorial content. That’s underscored by a study that she reported on called  “Going Native: Effects of Disclosure Position and Language on the Recognition and Evaluation of Online Native Advertising,” which examined how consumers react to the size and placement of native ad disclosure statements.



The FTC’s guidance makes sense within the context of consumer confusion. The guidance addressed native ads’ diverse formats, the types of native ads (everything from product reviews to blog posts and more) and their appearance within editorial content. In addition, the FTC called out labeling practices that are all over the map: some publishers have created prominent labels, others have taken a more sketchy approach with tiny fonts in hard-to-see colors like white and grey. Those tactics seem deliberately designed to confuse readers.

The FTC’s guidance warned that digital native ads that appear in news feeds of publishers' sites, social media posts, search results and email potentially can be deceptive, unless advertisers clearly disclose that the ads are, in fact, ads. Sounds simple and straightforward. The new guidance directs companies to label native ads that potentially could be mistaken for editorial content with terms like “advertisement,” “paid advertisement” or “sponsored advertising content.”

The FTC specifically called out labels such as “promoted” or “promoted stories,” stating that those terms “are at best ambiguous and potentially could mislead consumers that advertising content is endorsed by a publisher site.” Even language like “promoted by,” followed by the name of the advertiser, could be misinterpreted “to mean that a sponsoring advertiser funded or ‘underwrote’ but did not create or influence the content.”

Here are five key points you need to know about the FTC’s view regarding enforcement of native advertising:

  • FTC’s definition of native advertising: “Advertising that matches the design, style and behavior of the digital media in which it is disseminated.” Native formats are quite diverse and include written narratives, videos, infographics, images, animations, in-game modules, social posts, search results, email, playlists on streaming services and user-generated content. That's a pretty broad definition that covers a lot of territory. However there will always be new formats as the medium evolves. The definition will need to be flexible enough to accommodate publishers' creativity.
  • The types of native advertising the FTC wants to focus on are: Consumer reviews, expert opinion, news or feature articles, product reviews, investigative reports, scientific research and what it calls “fake government” and “fake business.” Look closely at these areas of focus. They are diverse! What the FTC means by "fake" government and business is unclear.
  • Advertising messages that are not identifiable as advertising are deceptive: The FTC plans to scrutinize target audiences, formats and messages. And, just because you have a disclosure on your native ads doesn’t mean your ad isn’t deceptively formatted for what the FTC defines as “reasonable consumers." Just what does the FTC mean by "reasonable consumers"? Hmm. Are they a majority of readers who are quite confused by what's a native ad and what's editorial content? Are most consumers confused?
  • While qualifying statements do help, the FTC says disclosures must be sufficiently prominent — not off to the side, not in tiny fonts or hard-to-see colors: This is so important. Take a look as you read your favorites and see how they're labeling native advertising. Which publishers have segued to a more prominent labeling format? Which haven't yet? How does the advertising look when labeled prominently? What is your reading experience like? How are the campaigns doing after prominent labels have been implemented?
  • Disclosures after the consumer has clicked through to the native content aren’t enough. Advertisers must be upfront and/or make plain and obvious that the content is advertising. An auto marketer might say in a headline: “Come in and take a test drive today.” That’s obvious advertising. This is a big deal. It's not enough to disclose that the content is native in the headline. After a consumer clicks through, disclosures must appear or advertisers need to make it clear, upfront, that the content is sponsored and obvious advertising.
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