On Wednesday, Dec. 4, the Federal Trade Commission (FTC) hosted a full day workshop to examine the blending of advertisements with news, entertainment, and other editorial content in digital media, referred to as “native advertising” or “sponsored content.” The workshop brought together publishing and advertising industry representatives, consumer advocates, academics, and self-regulatory organizations to explore the ways in which sponsored content is presented to consumers online and in mobile apps; consumers’ recognition and understanding of it; the contexts in which it should be identifiable as advertising; and effective ways of differentiating it from editorial content.
The title of the workshop was “Blurred Lines,” so before the discussions got underway it was clear that the Commission is concerned about the ability of users to distinguish editorial content from sponsored content. FTC Chairwoman Edith Ramirez provided introductory remarks defining the scope of the discussion.
Ramirez described native advertising and sponsored content as imitating the form and style of the media it is in, or providing ads that resemble digital editorial content. She also noted that while this approach helps provide more relevant messages, and sometimes allows advertisers to capitalize on the reputation of publishers, but that it also runs the risk of being deceptive and misleading, noting that the content could give the false impression that it comes from a non-biased source. Further, she identified the key focus of the workshop to explore whether industry self regulation and best practices are working, to ensure that users are able to distinguish between paid and editorial content, and the retransmition and aggregation of native advertising and the various ways this is done.
Native Advertising in the 21st Century
Native advertising isn’t exactly a new concept. Rather, the history of the “advertorial” goes back 100 years, with the FTC’s first settlement coming in 1917. As the FTC staff attorney noted early in the session, “unfair or deceptive acts or practices in or affecting commerce are hereby declared unlawful!” So while this is not a new concept, the 21st Century application has federal regulators seeking to ensure that notices distinguishing between editorial content and paid content keep pace with the rapid innovation of digital media and publishing.
The workshop drew heavily on the practices and expertise of cutting-edge digital content and advertising companies such as Mashable, BuzzFeed, Adiant, Outbrain and Huffington Post, as well more traditional media companies that have embraced native advertising such as Hearst and the Wall Street Journal.
What was particularly striking in the workshop’s discussions among industry leaders—even to a consumer who reads massive amounts of digital media from diverse sources and has represented the digital content industry since the early days of the Internet—was the rapid evolution of sponsored content, and how increasingly active marketers and advertisers have become in the generation of rich media content.