The FTC recently released two new guidance documents: Enforcement Policy Statement on Deceptively Formatted Advertisements and Native Advertising: A Guide for Businesses. The Policy Statement seeks to address the broad area of “advertising and promotional messages integrated into and presented as non-commercial content.”  The Business Guide more narrowly addresses native advertising, which the FTC defines as online content “that bears a similarity to the news, feature articles, product reviews, entertainment, and other material that surrounds it.”

The two new guidance documents are important developments as they provide a road map for how the FTC is likely to enforce in the area in the future.  The following are a few key takeaways.

  • In determining whether an advertisement is misleading as to its nature or source, the FTC will consider the overall net impression of the ad from the perspective of a reasonable member of the target audience.  Factors the FTC will consider include “the similarity of [the ad’s] written, spoken, or visual style to non-advertising content offered on the publisher’s site” and “expectations based on consumers’ prior experience” with the particular medium.
  • If an ad is likely to deceive as to its nature or source, the FTC expects clear and conspicuous disclosures clarifying the nature or source of the ad.
  • According to the FTC, disclosures in native advertising must often appear at the outset, before a consumer clicks on a link leading to the ad.
  • The FTC is unlikely to consider headings, such as “More Content for You” and “From Around the Web,” to be sufficient disclosures.
  • The FTC recognizes that not every ad that appears in a format similar to surrounding content is likely to deceive.  The FTC provides the following example: “[I]f a natively formatted ad with an image of a particular sports car and the headline ‘Come and Drive [X] today’ were inserted into the news stream of a publisher site, that ad likely would be identifiable as an ad to consumers, even though it was presented in the same visual manner as news stories in the stream.”