The Federal Trade Commission recently issued an enforcement policy statement addressing native advertising and "deceptively formatted advertisements" as well as business guidance on native advertising.
In the policy statement, the Commission describes general principles that it considers in determining whether a particular ad format is deceptive and violates the FTC Act. You can get a look at the full document here.
Under "deceptive advertising formats," it discusses:
- Advertisements appearing in a news format or that otherwise misrepresent their source or nature.
- Misleading Door Openers
- Deceptive endorsements that do not disclose a sponsoring advertiser
- Commission policy on deceptively formatted advertising
“The FTC’s policy applies time-tested truth-in-advertising principles to modern media,” said Jessica Rich, Director of the Bureau of Consumer Protection. “People browsing the Web, using social media, or watching videos have a right to know if they’re seeing editorial content or an ad.”
The FTC also released its native advertising guide for businesses.
The Interactive Advertising Bureau (IAB) expressed some concerns about the FTC's guidance. The organization issued a press release praising the Commission's work to provide guidance, but questioning several elements of said guidance.
“We very much appreciate the hard work the Commission has done to understand the issue of native advertising, and applaud the Commission for putting native advertising guidance into the marketplace,” said Brad Weltman, Vice President, Public Policy at IAB. “While guidance serves great benefit to industry, it must also be technically feasible, creatively relevant, and not stifle innovation. To that end, we have reservations about some elements of the Commission’s Guidance. In particular, the section on ‘clarity of meaning’ in native advertising disclosures is overly prescriptive, especially absent any compelling evidence to justify some terms over others.
We take the Commission’s final note to be a sign that enforcement in the native advertising space is not far behind this announcement. We hope that the cooperative, thoughtful and considered approach the Commission took in their exploration of this topic is reflected in future enforcement actions as we all move forward together to inform, entertain, and edify consumers, not fool them.”
“The IAB has been vocal that regardless of context, a reasonable consumer should be able to distinguish between what is paid advertising and what is a publisher’s editorial content,” added Weltman. “While we are pleased that the Commission Guidance concurs with this point of view, some of these new mandates require further consideration in order to best serve both the media and marketing industry, as well as consumers who turn to the web for free, ad-supported news, views, information, and entertainment.”
The IAB has a Native Advertising Task Force that will meet on January 5 to discuss the FTC's new documents and form new "more specific" and formal comments.