Thinking / FTC outlines native advertising rules

FTC outlines native advertising rules

Forms of native advertising have been around for years; however, it wasn’t until the advent of digital content (and the temptation to blur the lines between editorial and advertising) that it started to get a lot of attention.  According to Bi Intelligence, native advertising will grow from $8 billion in 2015 to $21 billion over the next few years.

So, what, exactly is native advertising? If you put “Native Advertising” into your Google search bar you will get a lot of different, yet similar, definitions. Basically, native advertising is content in the form of ad units designed to blend seamlessly into consumers’ digital experiences. In the print world, it’s been referred to as “advertorial.”

Where it gets sticky is, some publishers try to blur the lines between advertising and editorial.

At Marcus Thomas, we believe native advertising plays a significant role in connecting brands with customers, but we also feel strongly about the need to maintain separation between advertising and editorial. Apparently, the Federal Trade Commission (FTC) believes in this separation, as well.

In late December 2015, the FTC released an enforcement policy statement and a business guidance that clearly explained its rules for native advertising. It was more detailed than ever before. The most important things you need to remember from the FTC guidelines for native advertising are the following:

  1. An advertisement or promotional message shouldn’t suggest or imply to consumers that it’s anything other than an ad.
  2. Some native ads may be so clearly commercial in nature that they are unlikely to mislead consumers even without a specific disclosure. In other instances, a disclosure may be necessary to ensure consumers understand that the content is advertising.
  3. If a disclosure is necessary to prevent deception, the disclosure must be clear and prominent.

Because native ads typically look and live within the content of a news site, social site, blog, etc., the FTC recommends that the more a native ad looks like the content around it, the more likely it needs a disclosure to prevent deception.  In fact, a recent study by Contently confirmed that almost half of survey respondents could not distinguish between native advertising and editorial

So what does all this mean for advertisers and how will these guidelines play out in 2016? I sat down with Marcus Thomas’ Chief Client Officer Mark Bachmann to get the agency’s perspective.

“Native advertising has been a part of our lives for decades,” says Bachmann. “Brands are constantly trying to be at the top of mind for their customers. With unprecedented competition and the rise of ad blockers, it’s more important now than ever to make your content relevant and useful for your audience.”

When it comes to the updated FTC guidelines, Bachmann thinks it’s important to develop and implement guidelines to separate those trying to sell something, whether a product or service, and those in the editorial world who are to provide objective, non-biased information on that product or service.

“As more editorial outlets hire teams strictly to create native, branded content, it will become even more challenging to maintain that objectivity,” says Bachmann.  “We all know that if a brand wants trust from a consumer, that brand needs to behave in a way that earns that trust. Seamless inclusion is good. Deception is bad”  

Bachmann says Marcus Thomas continues to advise its clients to use good judgment and understand the regulatory information set forth by the FTC.

“We pride ourselves in helping our clients create relevant content for their target audience,” says Bachmann. “The rules in advertising have been grey, but it’s promising to see clear regulations are being discussed by associations such as the FTC and American Association of Advertising Agencies (4As).”

Bachmann also serves on the 4As National Board of Directors as the chairman of the president’s council in Northeast Ohio.

To read the Advertising Age article on the new FTC native advertising guidelines, click here.