Advertisers Must Warn Users About Native Advertising: FTC

(December 28, 2015) Online users must be clearly warned when viewing “native advertising.” If not, the advertiser may be engaging in prohibited deceptive advertising, the Federal Trade Commission (FTC) warns.

In a new “Native Advertising A Guide for Businesses,” the FTC notes that “advertisers are responsible for ensuring that native ads are identifiable as advertising before consumers arrive at the main advertising page. In addition, no matter how consumers arrive at advertising content, it must not mislead them about its commercial nature.”

“Native advertising” means content that bears a similarity to the news, feature articles, product reviews, entertainment, and other material that surrounds it online. Native ads appear not only on websites but also in social media and email. As a result, the FTC says consumers must be able to distinguish advertising from the other content.

The FTC explains that in general a disclosure should be in clear and unambiguous language, as close as possible to the native ads to which they relate, in a font and color that is easy to read, and in a shade that stands out against the background.

In further explaining how disclosures should be made, the FTC advises:

• The disclosure that an ad is commercial content should appear near the ad’s focal point. When browsing the main page of news or content aggregator sites, consumers typically look at story headlines on the site. Placing disclosures near a native ad’s headline increases the likelihood consumers will see them.
• If a site is read left to right, consumers are less likely to notice disclosures positioned to the right of the native ads to which they relate.
• If native ads are inserted into a vertical stream of content, placing a disclosure below a native ad increases the risk that consumers will click on the ad without seeing the disclosure.
• For images or graphics, the disclosure should appear near the focal point of the image or graphics.
• For videos, the disclosure should be placed directly on the thumbnail image itself.
• URL links for posting or sharing in social media or email should include a disclosure at the beginning of the native ad’s URL.
• Disclosures should stand out and advertisers should take into account the size and configuration of the device screens consumers will typically use to view the content.

The guidelines also warn that “in appropriate circumstances, the FTC has taken action against other parties who helped create deceptive advertising content—for example, ad agencies and operators of affiliate advertising networks. 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.”

Balough Law Offices reviews advertising content for its clients to assure compliance with FTC rules and guidelines.