• by Justin Choi , January 29, 2016

By announcing its Enforcement Policy Statement on Deceptively Formatted Advertisements and supplementary Guide for Businesses, the FTC has given native advertising clearer rules of engagement. At the heart of its 27-page guidance, the FTC’s overarching position is simple: Promotional messages are deceptive when they are not clearly identifiable by consumers as advertising.

Potential deception is a bad user experience and needs to be prevented.

Here are five top-line takeaways from the FTC’s latest guidelines, with recommendations for publishers, and advertisers, to move forward.

1. The Guidelines Distilled

The FTC used 17 examples to make the point that content sponsored by a brand doesn’t automatically make it an ad. Some may interpret the FTC’s brand content examples as many shades of gray. The examples illustrate varying levels of native advertising’s editorial versus promotional nature. 

Despite some perceived gray or ambiguity, it is clear that the FTC advises appropriate disclosures to help prevent consumer deception. The disclosure guidance from the FTC break down into two distinct areas.

Disclosures should clarify that the advertiser:

(A) paid to the have the content shown or featured and

(B) wrote or influenced all or some of the content.

2. Provide Dual Disclosures For Brand Content

To accomplish proper disclosure, publishers should require that brand content has both a clearly visible “sponsored content” label, as well as a separate byline attributing the article to the advertiser. The “sponsored content” label addresses the first potential area of confusion of who paid for distribution, and the byline makes it clear that an advertiser wrote or influenced the content.

These disclosures should exist on the native ad unit, content landing page, and even social shares. Disclosures made after the click are not enough.

3. Direct Response In the Feed Is An Advertisement

The recommended disclosures above do not cover direct response content focused on driving users to “Buy Now” or immediately convert. This is where in-feed linked ads that look native and fail to deliver any meaningful content, but instead lead consumers to conversion pages can run into issues. 

The FTC says if the ad is entirely promotional without any editorial value, it should be labeled as “Advertisement” or made to clearly look like an ad. Better yet, we recommend that publishers avoid placing these ads in the feed altogether and put them back into their banner slots.

 

Publishers should be prudent and block revenue partners from injecting these kinds of ads into their feeds; otherwise risk becoming an enabler of the type of confusion that the FTC warns against. Before fully trusting these operators, request to see their content acceptance policy and make sure that their adherence to a content policy is a prerequisite to partnership.

4. Don’t Let Content Rec Become a Content Wreck

Content recommendation widgets tend to have weak disclosures, muddling the source of the content and clarity into why it’s being featured. The most aggressive performance advertisers also heavily use content recommendation, leveraging confusion as a tactic to drive clicks.

The obvious bad actors here have existed across all other ad categories: ones that falsely imply substantiated medical claims, association with government agencies, or impartial third-party endorsement.

The FTC calls out these examples explicitly and liability may exist beyond the advertiser. Supplier, beware.

5. Be Transparent with Traffic Driving Disclosures

Publishers that use content recommendation as a reach extension tactic to drive traffic to brand content may confuse consumers by implying pure editorial promotion. In this case, publishers should list the advertiser as the source of the content before the user clicks.

The FTC also references advertisers that use content recommendation and in-feed ads to promote favorable editorial that happened to be created independently by a publisher. The FTC explains that the advertiser is responsible for the accuracy of that content and should disclose that they paid for its traffic boost.

Deception is the ultimate bad user experience. Delivering bad user experiences degrades the entire native advertising category. By removing confusion, clarifying disclosure guidelines, and putting bad actors on notice, the FTC guidelines don’t hurt native’s long-term viability, they help it.