Digital advertisers innovate new techniques to reach customers at a speed that, for the most part, outstrips the ability of the US government to regulate. Every now and then, however, the Government lurches forward to provide truly useful guidance.

At the end of the year the government lurched. On December 22, 2015, the Federal Trade Commission issued a policy statement and guidelines to advise businesses on the proper and improper uses of “native advertising.” This statement and guidelines are not new law, just new and solid details on how the FTC will decide whether a native ad is “deceptive.” 

Outside the online advertising industry, “native advertising” is not a widely known term. In fact, the FTC itself does not have an official definition. The definition we use derives from the Interactive Advertising Bureau, which calls native advertising “paid ads that are so cohesive with the page content, assimilated into the design, and consistent with the platform behavior that the viewer simply feels that they belong.” For anyone who grew up with printed magazines, think “advertorial” as a type of native advertising – that is, an advertisement dressed up to look like an article that is supposed to include a disclaimer stating that the article is a paid advertisement.

Today, native advertising comes dressed in many forms – ads that pop up in your Twitter or Facebook feeds, ads that pop up alongside your search results, recommendation widgets, and promoted listings on sites like Buzzfeed. In fact, the form and types of advertising that can fall under the rubric of “native advertising” will likely evolve for the foreseeable future as advertisers pioneer new ad techniques. The FTC’s guidelines and policy statement cannot address every scenario – although, to its credit, the guidelines do evaluate 17 different examples of native advertising, and suggest whether disclosures are needed.  The takeaways you should understand from the FTC are these:

  1. Regardless of content, the mere format of an ad can be deceptive, particularly in the absence of a disclosure that the content is an ad.
  2. An ad also can be deceptive even if its content is true and correct when it misleads consumers about whether the ad is advertising or whether the content is “sponsored” by an advertiser.
  3. A “clear and conspicuous” disclosure that the content is an ad is an acceptable method of dispelling any otherwise deceptive qualities. 
  4. Most important to keep in mind: For a disclosure to be clear and conspicuous, it needs to be:
  • Near the ad content, typically above or in front of the headline of the native ad
  • Easily readable, so that they stand out from the native ad
  • In plain, straightforward language that a consumer can understand

For advertisers in this game, showing your cards might save you from losing to the house.