FTC: Native Ads “May Be Illegal” In Some Cases

The FTC this week held a workshop in which the topic of “Native Advertising” was discussed. FTC Chairwoman Edith Ramirez is quoted by Reuters saying, “By presenting ads that resemble editorial content, an advertiser risks implying, deceptively, that the information comes from a non-biased source.”

The implication is that the FTC is ready to crack down on the rapidly growing format, which is either being used or actively considered by three-fourths of online publishers, including the NY Times.

In a way the entire point of Native Ads is to make them closely resemble editorial so consumers are more inclined to click or view the advertorial content and don’t avoid them as they often do conventional digital ads.

The IAB would probably take strong exception to my characterization. Literally one step ahead of the law, the trade group issued a new Native Advertising Playbook coinciding with the timing of the FTC workshop. The IAB is trying to head off any further regulatory scrutiny or investigation of Native Ads.

Inoculating Native Ads against regulatory action is probably just a matter of stronger labeling and sufficiently differentiating the presentation of these ad units from the main editorial content of the site.

Comments coming out of the ANA after the FTC workshop suggested that the industry organization is not particularly concerned about any immediate regulatory intervention.

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