According to the Federal Trade Commission’s recent policy, native ads should be labeled and formatted, so that they clearly look like ads, and readers do not mistake ads for content. For your convenience, we have compiled a few key instructions.
The Federal Trade Commission’s recent enforcement policy statement and business guidance document is a game-changer for native advertising. The sixteen-page statement states exactly how native ads should be labeled – and formatted – so that they clearly look like ads, and readers do not mistake ads for content. As the FTC says, “It’s the FTC’s job to ensure that long-standing consumer protection principles apply in the digital marketplace, including to native advertising.”
Working around the Ad Blockers
Bottom line: Truth-in-advertising standards apply to native advertising as much as they do in more traditional forms of digital marketing. The FTC’s decision to come out actively on this issue is going to have a real impact on the industry. Native ads have become the fastest-growing alternative to traditional digital advertising – primarily in response to the growth of ad blockers. Publishers and advertisers looking for new ways to reach consumers online focus on native ads, as the most successful means of providing promotional content that is not filtered out by ad blockers.
Call a Spade a Spade
The challenge lies in the FTC’s approach to disclosure. Here’s how the FTC defines appropriate disclosure:
- Language: Clear and unambiguous
- Placement: Close to the native ad
- Font and Color: Easy-to-read
- Background: A shade that stands out
The FTC has defines promotional messages as deceptive if they give the impression (expressly or by implication) that they are from a source other than a sponsoring advertiser. Here is one quote from the FTC statement: “If a natively formatted ad appearing as a news story is inserted into the content stream of a publisher site that customarily offers news and feature articles, reasonable consumers are unlikely to recognize it as an ad.”
Toeing the Line
While the FTC has indicated that there must be clear and prominent disclosure, the exact nature of disclosure really depends on the context. Something that is acceptable on a website might be less noticeable—and therefore perhaps constitutes a violation of the guidelines—on a video portal, on mobile, on a tablet, or in another format.
The consumer’s mindset is the key factor. For example, native ads may integrate text labels, company logos, background shading and borders—but for multimedia ads, it may be necessary to have some combination of graphic, video or audio disclosures. On a video site, it may not be sufficient to have a written description, and the disclosure will be required to be located on thumbnail images.
Publishers, Agencies and Networks – Beware!
And it’s not just about advertisers. While traditionally the FTC has not taken action against media companies over native ads, it seems that their focus may have shifted. The anticipation is that, eventually, they are likely to take steps to enforce their guidelines. Some of the greatest users of native advertising are blog and content destinations. The new guidelines specify that native ads published on these sites must adhere to the disclosure requirements, even though the content from those ads is syndicated.
Changes and trends to the industry may emerge quickly; we’ll just have to wait and see. It is obvious that implementing the new FTC guidelines will result in a drop in the overall effectiveness of native advertising. However, given the FTC’s increasing involvement in the industry, it’s best to play it safe and pay attention to the new rules of the game.