Native advertising—a short-hand term for the blending of advertisements with news, entertainment, and other editorial content—comes in a variety of shapes and sizes, examples of which can be seen in any publishing medium. Native advertising’s popularity is unsurprising: brands are promised new and fluid ways to reach readers without disrupting their regular engagement with the product, and publishers have new ways to monetize their products. But what brands and publishers may call a boon, the Federal Trade Commission may not. More flexible digital mediums give brands and publishers the ability to experiment with new types of sponsorship that can potentially upend what consumers recognize as advertising. On December 4th, the Federal Trade Commission hosted a workshop to explore industry and practical viewpoints on the so-called “blurred lines” of native advertising. The prevailing questions of the day were, “Does this practice need to be specifically regulated, and if so, what are the best ways to do it?”  

Although simple in its mandate, the workshop uncovered no cure-all. In fact, not all could quite agree on the problem. At the end of the day, it was clear that regulating such diverse varieties of native advertising may prove difficult, as the infinite styles seem only to be limited by brand and publisher creativity. According to some industry viewpoints expressed throughout the workshop, native advertising is, to a certain extent, self-regulating. The theory goes that publishers cultivate trust from readers, and they risk alienating readers when they abuse that trust by deceptively inducing the reader to read advertising content framed as their editorial content. Indeed, this trust-principle is prevalent in self-regulatory guidelines published by two industry groups, the American Society of Magazine Editors (ASME) and the Interactive Advertising Bureau (IAB). The ASME Guidelines for Editors and Publishers outlines specific best practices for print and digital publishers, but the guidance can be distilled to the paramount directive: “no fooling the reader.” Also released on the same day as the FTC workshop was the IAB’s Native Advertising Playbook. The Playbook distinguishes between six specific types of native advertisements: In-Feed Units, Paid Search Units, Recommendation Widgets, Promoted Listings, In-Ad with Native Element Units, Custom/“Can’t Be Contained.” However, unable to promote a one-size-fits-all disclosure mechanism to all six types of native ads, the IAB instead demands adherence to the “core principle that regardless of context, a reasonable consumer should be able to distinguish between what is a paid native advertising unit vs. what is publisher editorial content.”

While most at the workshop did seem to agree that deceiving readers by failing to label advertising was both illegal under Section 5 of the FTC Act and ethically problematic under journalistic standards, the nuanced questions proved more vexing. The following are just a few of the unanswered questions addressed by panelists throughout the workshop:

  • What level of brand involvement—both in the context surrounding the writing of the article and in the choosing or drafting of the actual content of the article—constitutes advertising and requires labeling?
  • If content does require labeling, what is the best way to signal advertising content to the reader?
    • What graphical schemes best visually separate advertising content from editorial content?
    • What words or phrases, such as “Sponsored By,” “Brought to You By,” or “Generated by,” most clearly describe to readers the brand-publisher relationship?

TIP: Brands and publishers risk deceiving consumers when a brand significantly influences content and the content is not accurately labeled. The FTC and the NAD will continue to analyze these fact-specific problems on a case-by-case basis, and the convening of the December workshop illustrates that the FTC will continue to scrutinize deceptive native advertising practices.