FTC issues Enforcement Policy Statement and business guidance on native advertising

If what looks to be an article, video, or game is really an ad – but it’s not readily identifiable to consumers as such – the FTC has another word for it: deceptive. Ads that blur the line between advertising and content have long been a consumer protection concern under Section 5 of the FTC Act. The FTC just issued an Enforcement Policy Statement on Deceptively Formatted Advertisements that reiterates how it applies established legal principles to determine whether the format of online advertising is misleading.

Why does format matter? Knowing that something is an ad likely will affect the weight or credibility consumers give the information it conveys – or even whether they want to open it, click it, or read it at all. That’s why it’s deceptive to suggest or imply that promotional content is independent, impartial, or from a source other than the sponsoring advertiser. In other words, an ad shouldn’t convey that it’s anything other than an ad. The Enforcement Policy Statement explains how the FTC has applied – and will continue to apply – that bedrock tenet in evaluating the format of native advertising.

If you’re looking for advice on how that works in real-world settings, a new brochure, Native Advertising: A Guide for Businesses, walks advertisers through 17 examples and explains how FTC staff would evaluate them under Section 5. What’s the top takeaway? Transparency. It should be clear to consumers that what they’re looking at is an ad. If a disclosure is necessary to avoid deception, make it clear and prominent. The Guide includes pointers to help you meet that standard.