FTC Spells Out Native Advertising Enforcement Policy

For the past several years, the FTC has expressed increasing concern over the use of “native advertising” content that bears a similarity to the news, feature articles, product reviews, entertainment, and other material that surrounds it online. This week the FTC spelled out its enforcement position on native advertising, while releasing a guide for business (both of which are below).

The Commission embraced earlier staff conclusion that

consumers ordinarily would expect a search engine to return results based on relevance to a search query, as determined by impartial criteria, not based on payment from a third party. Knowing when search results are included or ranked higher based on payment and not on impartial criteria likely would influence consumers’ decisions with regard to a search engine and the results it delivers. Thus, failing to clearly and prominently disclose the paid nature of such advertising results is deceptive.

The FTC will look to consumer’s expectations such that

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.

This can be cured via disclosures.

The FTC’s guide for business provides specific examples where disclosures are warranted, while spelling out that disclosures must be

in clear and unambiguous language;
as close as possible to the native ads to which they relate;
in a font and color that’s easy to read;
in a shade that stands out against the background;
for video ads, on the screen long enough to be noticed, read, and understood; and
for audio disclosures, read at a cadence that’s easy for consumers to follow and in words consumers will understand

Disclosures must be clear and prominent on all devices and platforms that consumers may use to view native ads.

Specifically, the FTC recommended that:

Disclosures be placed in front or or above the headline of a native ad (or where an image is used to draw attention on the image itself).
Disclosures should also be on the click into page where the native ad appears.
Disclosures should stand out. For example, any background shading used to differentiate native ads from non-advertising content should be sufficiently saturated for consumers to notice it.
Multimedia ads that deliver an audio message may require an audio disclosure. Audio disclosures should be in a sufficient volume and cadence for ordinary consumers to hear and comprehend them.
Disclosures must be understandable and avoid jargon. Terms likely to be understood include “Ad,” “Advertisement,” “Paid Advertisement,” “Sponsored Advertising Content,” or some variation thereof. 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.

Finally, the FTC noted that these standards do not just apply to advertisers, but to those who helped create deceptive advertising content – for example, ad agencies and operators of affiliate advertising networks.

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