Publishers Need to Take Note of New FTC Guide on Native Advertising

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On one side sit publishers who are getting revenue from running native advertising/sponsored content and finding that—when made valuable and clearly labeled—readers are engaging with it and mostly not objecting.

On the other side sit folks like Jeffrey Chester, executive director of the Center for Digital Democracy: "What's needed is a 21st-century set of safeguards that enable consumers to control the data used to deliver them ads, especially formats like native that are specially designed to be disguised as content."

The Federal Trade Commission came down somewhere in the middle recently when it issued an enforcement policy statement on native advertising and a guide intended to prevent customers and readers from being misled. Most importantly, there is now specific language that should be used in disclosures, and specific placement for that language. Native Advertising: A Guide for Businesses is worth a read for any publisher using—or hoping to use—sponsored content.

"The Commission identifies specific terms that are likely to be understood, such as: 'ad, 'advertisement,' 'paid advertisement,' 'sponsored advertising content,' or some variation thereof," wrote my colleague David LeDuc, SIIA's senior director, public policy, in an excellent blog post for us. "It also identifies that the following terms should not be used: 'promoted' or 'promoted stories,' which are ambiguous and potentially misleading. 

"Also, terms such as 'presented by [x},' 'brought to you by ,' 'promoted by [x],' or 'sponsored by [x]' may reasonably be interpreted by consumers that a sponsoring advertiser funded or 'underwrote' but did not create or influence the content. This is important in cases where editorial staff may work directly with advertisers or sponsors. In those cases, it's not unlikely that the FTC could find these labels misleading."

The Commission was also specific about publishers being included in this warning—addressing "everyone who participates directly or indirectly in creating or presenting native ads should make sure that ads don't mislead consumers about their commercial nature."

Here are some other rules that might affect publishers:

- The more a native ad is similar in format and topic to content on the publisher's site, the more likely that a disclosure will be necessary to prevent deception.

- Disclosures are needed both on the publisher's site and the click- or tap-into page on which the complete ad appears, unless the click-into page is obviously an ad.

- Place disclosures in front of or above the headline of the native ad.

- If a native ad's focal point is an image or graphic, a disclosure might need to appear directly on the focal point itself.

- Disclosures should remain when native ads are republished by others. 

- In multimedia ads [such as videos], a disclosure should be delivered to consumers before they receive the advertising message to which it relates.

- Using consistent terminology to identify ads on the same publisher site decreases the likelihood that consumers will misunderstand a native ad's disclosure. 

Writing in The New York Times, Sydney Ember noted that the FTC is just an enforcement agency and its recommendations are not laws. "Still, publishers and advertisers who do not comply with the guidelines risk being held out as examples of bad actors. There could also be financial sanctions."

He added that marketers and publishers "worry that the guidelines could stifle further advancements in an area that they both have come to increasingly rely on."

"As soon as you start to standardize things and put guidelines around things, you limit the level of creativity and innovation that is able to occur," said Mark Howard, the chief revenue officer of Forbes Media, told the Times. "If you put out stringent guidelines, are you going to put people back in the box?"

LeDuc admits that, to no one's surprise, there remain some gray areas, "such as those where there is close collaboration between editorial staff and sponsors in the production of content, depending on how this may be placed."

But he also notes what is clear: "...publishers and other businesses are officially on notice that the FTC is likely to ramp up enforcement in this area. So, a review of your current practices with respect to native advertising and sponsored content would be an excellent New Year's resolution!"

Again, here is the link to the new Guide.

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Ronn Levine began his career as a reporter for The Washington Post and has won numerous writing and publications awards since. Most recently, he spent 12 years at the Newspaper Association of America covering a variety of topics before joining SIPA in 2009 and SIIA in 2013 as editorial director…