Last week, the FTC issued its long-awaited Enforcement Policy Statement on Deceptively Formatted Advertisements, often referred to as “native advertising.” For those unfamiliar with the term, the FTC helpfully explains that “native advertising” is advertising and promotional content designed to be integrated into — and often indistinguishable from — editorial and other non-commercial content published in print and digital media.
While the terminology may be unfamiliar to many consumers, native advertising has become increasingly common — Twitter, the New York Times website, National Geographic magazine and Buzz Feed all publish native advertisements. That’s why the FTC has become so concerned.
The Policy Statement does not constitute binding regulatory action, but rather lays out the governing principles that the FTC will apply in evaluating whether a particular presentation of native advertising is deceptive. And now that these guidelines have been established, it may not be long before the FTC starts applying them in enforcement actions against advertisers, publishers, content distributors and/or advertising agencies. (The Commission specifically noted that “everyone who participates directly or indirectly in creating or presenting native ads should make sure that ads don’t mislead consumers about their commercial nature.”)
To help businesses avoid liability for deceptive advertising, the FTC also issued Native Advertising: A Guide for Businesses, providing 17 examples of real-world situations in which native advertising might be used. These examples offer valuable guidance as to whether the presentation of ad content is likely to be considered deceptive. Part 2 of this post will focus on these examples and what they reveal about the FTC’s anticipated enforcement strategy. For now, it is useful to consider the basic principles underlying the Commission’s approach to native advertising, as set out in the Enforcement Policy Statement:
These principles seem very straightforward and have been applied to non-native ads in the past. But to find out how they might play out in a variety of realistic native advertising scenarios, stay tuned for Part 2 of this blog post.