As the new year unfolds, a form of advertising that has gained popularity online could be in jeopardy. "Native advertising" -- advertising that essentially takes the form of the medium in which it appears -- is under intense scrutiny by the Federal Trade Commission (FTC). In fact, in late December 2015, the FTC issued a specific "guide for businesses" in using native advertising. While the FTC didn't come right out and outlaw the use of native advertising, the agency did bluntly state that consumers must be able to distinguish native advertising from other content.
Here is how the FTC defines whether or not native advertising is deceptive:
"Any clarifying information necessary to prevent deception must be disclosed clearly and prominently to overcome any misleading impression. ...Advertisements or promotional messages are deceptive if they convey to consumers expressly or by implication that they’re independent, impartial, or from a source other than the sponsoring advertiser – in other words, that they’re something other than ads.
"In the context of native advertising, if the source of the content is clear, consumers can make informed decisions about whether to interact with the ad and the weight to give the information conveyed in the ad. However, an ad is deceptive if it promotes the benefits and attributes of goods and services, but is not readily identifiable to consumers as an ad. Thus, as the Policy Statement explains, the FTC will find an ad’s format deceptive if the ad materially misleads consumers about its commercial nature, including through an express or implied misrepresentation that it comes from a party other than the sponsoring advertiser."
In its guidelines document, the FTC offers several examples of when and how native advertising must be identified.
The FTC's new guidelines potentially deal a serious blow to much native advertising in its current form, because publishers and advertisers alike frequently "embed" advertising into editorial content without overtly identifying it as advertising. Every marketer should read the new guidelines, available here:
https://www.ftc.gov/tips-advice/business-center/guidance/native-advertising-guide-businesses
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