One of the Federal Trade Commission’s core missions is investigating and taking action against false and deceptive advertising claims. For any advertiser or marketer, being on the receiving end of an enforcement action is a serious, possibly long-term endeavor. In late December 2015, the FTC released its Enforcement Policy Statement on Deceptively Formatted Advertisements. Clearly, the statement’s name alone sends a strong signal that the FTC sees native advertising, AKA, “Branded Content,” as an important issue when the material is not clearly and conspicuously disclosed as advertising content. In the FTC’s own words, “an ad shouldn’t convey that it’s anything other than an ad.”
To help businesses comply with the new FTC policy, it has issued a Guide for Businesses that provides 17 text-only examples of what not to do in video games, websites/online magazines, social media and video platforms, and search results. The bottom line is that native advertising, no matter the medium or size/placement constraints, has to be clearly labeled as such.
From the proverbial horse’s mouth:
“Disclosures that are necessary to avoid misleading consumers must be presented clearly and prominently. Whether a disclosure of a native ad’s commercial nature meets this standard will be measured by its performance – that is, do consumers recognize the native ad as an ad? Only disclosures that consumers notice, process, and understand can be effective.”