The U.S. Federal Trade Commission held a workshop on native advertising on Wednesday called “Blurred Lines: Advertising or Content”.

The workshop was designed to examine the practice of blending sponsored stories in with editorial content, and brought together publishing and advertising industry representatives, consumer advocates, academics and self-regulatory organizations. The workshop was free and open to the public, and apparently things got heated with “arguments flying,” according to Ad Age.

Online publishers continue to face the battle against ad-blocking software and “do not track,” and need ways to to generate revenue to stay in business. Native advertising just happens to be one of the more attractive methods to many, and it’s not likely to go away anytime soon.

Reuters reports that an FTC survey of publishers found that 73% are already using native advertising. According to the report, the FTC says it may be illegal in some cases, and warned that ads must be clearly marked. It quotes FTC Chairwoman Edith Ramirez:

“While native advertising may certainly bring some benefits to consumers, it has to be done lawfully. By presenting ads that resemble editorial content, an advertiser risks implying, deceptively, that the information comes from a non-biased source.”

Inadequately disclosed native ad content can cost sites in Google rankings as well. Earlier this year, the search engine warned that it was cracking down on this, and its head of web spam, Matt Cutts, talked about its related policies in a five-minute video:

“if you are doing disclosure, you need to make sure that it’s clear to people,” he said. “A good rule of thumb is that there should be clear and conspicuous disclosure. It shouldn’t be the case that people have to dig around, buried in small print or have to click and look around a long time to find out, ‘Oh, this content that I’m reading was actually paid.’”

He suggested using text like “Advertisement” or “Sponsored” to make advertorial content clear to users.

Interestingly enough, Consumer Watchdog just filed a complaint with the FTC, claiming that Google isn’t labeling its own paid content clearly enough.

The Interactive Advertising Bureau has put out a new playbook for native advertising addressing in-feed units, paid search units, recommendation widgets, promoted listings, IAB standard ads with native elements and custom ads. It suggests marketers address six considerations: form, function, integration, buying/targeting, measurement and disclosure.

Image: FTC