Nearly two years after its first public hearings on the matter, the Federal Trade Commission finally weighed in with new native advertising guidelines for print and digital publishers.
While it does not require full disclosure that all sponsored content is an ad, the FTC is pushing for some variation of the word “advertisement” to appear near native ads that it deems could create confusion if consumers cannot discern quickly and simply that what they are viewing is a paid ad.
The FTC guidelines frown on the popular catch phrases such as “promoted by” or “sponsored by” that many publishers have favored when describing a native ad on their sites.
Basically, a native ad is content paid for by an advertiser but made to look very much like the journalistically generated content that publishers produce in digital format, but at times in print and even video games. The FTC said the primary guideline must be to avoid deceiving consumers.
“Advertisers should not use terms such as ‘Promoted’ or ‘Promoted Stories,’ which in this context are at best ambiguous and potentially could mislead consumers that advertising content is endorsed by a publisher site,” the FTC said in its guidelines released Dec. 22.
There are several other words that the FTC does not like.
“Depending on the context, consumers reasonably may interpret other terms such as ‘Presented by [X],’ ‘Brought to you by [X],’ ‘Promoted by [X]’ or ‘Sponsored by [X]’ to mean that a sponsoring advertiser funded or ‘underwrote’ but did not create or influence the content.”
The Interactive Advertising Bureau applauded some aspects of the new guidelines but said it has “concerns” that the FTC employed “granular dictating of word choice,” according to Brad Weltman, vice president of public policy at the IAB.
The FTC does allow a fair amount of leniency in other areas.
For instance, it does not automatically reject ads that have the same look and feel of the content, so long as consumers would not be deceived. It points to a hypothetical running-shoe manufacturer whose native ad could appear on a financial news site without requiring disclosures, since consumers were not likely to be confused into thinking the shoe information is connected to the financial editorial.
Other areas could get a pass as well. “Native ads can also be integrated into content including entertainment programming and video games,” the FTC said.
“In some instances, consumers are likely to understand that a sponsoring advertiser paid for the product integration. In other instances, a disclosure may be necessary to avoid deceiving consumers.”
No penalties for violating the guidelines were disclosed — so far.
Joe Mohen, the ex-CEO of Nylon Media who has bought and sold a number of digital operations, said he predicted that the FTC would only follow up with “spot enforcement of the most egregious violations.”
“I could see more enforcement in the area of pharmaceutical ads, where misuse of that could have a highly negative impact,” Mohen said. “But for other publishers in fashion, beauty or entertainment, there is not much of a Chinese wall to begin with.”