This is PART TWO in a five part series focusing on Internet marketing and online lead generation compliance.
The native advertising landscape is rapidly evolving with respect to publisher-advertiser relationships, as well as consumer perceptions of native ad products and brand interaction. Given the fact that native advertising can easily camouflage marketing messages so that they appear to be editorial content, advertisements can often be challenging for consumers to identify.
While the FTC does not appear to have adopted an internal policy that native advertising is inherently deceptive, perhaps recognizing the clear benefits of brand exposure and entertaining content, the regulatory crackdown has already begun.
WHAT IS NATIVE ADVERTISING?
Native advertising can take many different forms and, as a result, may be difficult to define and identify. For example, “in-feed content” appears in a website’s content area and can be sponsored articles, as well as advertisements designed to appear to be articles that match the content surrounding it. “Search ads” appear at the top of search engine results and appear to be similar to organic search results. “Recommendation widgets” are paid for advertising units that direct website visitors to other advertising content. “Promoted listings” are sponsored ads that appear in a preferred position within eCommerce website listings. “In-ads” are contextual advertisements.
While the IAB Advertising Playbook outlines the most popular categories of native advertisements, other forms are continuously being designed and implemented.
KNOW THE IAB NATIVE ADVERTISING PLAYBOOK
In 2013, the Interactive Advertising Bureau released the IAB Advertising Playbook which provides a framework when considering native advertising compliance. The Playbook lays out a framework, or checklist of questions, that marketers should ask themselves when evaluating native ad options in the context of specific ad formats, including queries related to form, function, integration, buying and targeting, and measurement. The Playbook also emphasizes the need for effective disclosures so that consumers are able to distinguish between paid advertising and publisher editorial content.
CONSIDER THE AMERICAN SOCIETY OF MAGAZINE EDITORS GUIDELINES
The American Society of Magazine Editors guidelines consider native advertising ethical boundaries, including that no product should receive editorial endorsement in exchange for payment.
Regardless of platform or format, according to ASME guidance, the difference between editorial content and marketing messages should be clear to the average reader. On websites populated by multiple sources of content, including user-generated content, aggregated content and marketer-provided content, editors and publishers must take special care to distinguish between editorial content and advertising. Advertisements that mimic the “look and feel” of the print or digital publication in which they appear may deceive readers and should be avoided.
Digital advertisements that resemble editorial content should be identified as advertising in compliance with Federal Trade Commission regulations . When a marketing message “uses the format and has the general appearance of a news feature and/or article for public information which purports [to be] independent, impartial and unbiased . . . the Commission is of the opinion that it will be necessary to clearly and conspicuously disclose it is an advertisement.”
Advertising content should be visually distinguished from editorial content. Collections of sponsored links should be clearly labeled as advertising and visually separated from editorial content.
REGULATORY FOCUS ON NATIVE ADVERTISING DISCLOSURES
There is no one-size-fits-all disclosure mechanism for each native sub-group. There is, however, a consistent regulatory approach that evaluates whether an ordinary reasonable consumer is able to distinguish between what is a paid native advertising unit versus what is publisher editorial content.
The FTC’s primary inquiry is whether consumers recognize that what they are seeing is advertising. The Commission focuses less on the content of native advertising, and more on how such advertising is displayed and labeled on a website.
Advertisements are viewed from the standpoint of the “overall net impression” upon a reasonable consumer. Use of the word “Sponsored” alone may not be enough to avoid allegations of deceptive advertising. Nor is use of the term “Advertorial” when presented in inconspicuous font.
The FTC takes the position that reasonably prudent consumers may only look at the headline and not the fine print. “You may also like this,” when ‘this’ is an advertisement may also be considered deceptive by the Commission.
Commonly used disclosure language may depend upon the type of advertising unit.
There are no magic words and no industry standard for disclosure language. Consider language that accurately conveys the relationship and the nature of the content. For example, using “brought to you by” or “made possible by” conveys the objective message that the sponsor has provided financial support. Conversely, “advertisement,” “ad,” “sponsor message” and “sponsored content” suggest a higher degree of brand involvement. “Sponsored by,” “suggested post,” “feature partner” and similar ambiguous terminology must be used cautiously.
There is no single disclosure mechanism for each native type. What is universal is that paid for native ad units must deliver disclosures clearly, conspicuously and prominently consider using borders and shading that separate native advertising from editorial content.
Regardless of the native advertising type, paid native ads must use language that conveys that the advertising has been paid for, thus making it an advertising unit, even that unit does not contain traditional advertising messages. The disclosure must be large and visible enough for a consumer to notice it in the content of a given page and/or relative to the device that the ad is being viewed upon.
Simply stated, regardless of context, a reasonable consumer should be able to distinguish between what is paid advertising versus what is publisher editorial content. Context is key.
RIGHT OF PUBLICITY CLAIMS
An often overlooked area of potential liability in the native advertising context is whether the content infringes on the rights of a person or whether the content constitutes fair use pursuant to intellectual property law and the First Amendment. Even content that does not make product or service claims, or promote the sponsor or its products or services, may be subject to claims that it infringes on privacy rights and is an unlawful use of third-party intellectual property. Unless content is purely editorial, all rights related thereto should be licensed.
PUBLISHER LIABILITY FOR CREATING MISLEADING NATIVE ADS
The FTC has made it abundantly clear that publishers taking the role of an ad agency by creating content for marketers are well advised to ensure that they are not creating misleading native advertising. While, traditionally, the Commission may not have held publishers that were just distribution channels responsible for misleading advertisements, it will not hesitate to do so when the publisher is actively involved in the creation process.
PRACTICAL TIPS FOR ADVERTISERS AND PUBLISHERS
Consult with experienced advertising compliance counsel in order to ensure clear, conspicuous and compliant native content disclosures, as well as clearance of third-party rights. Develop and implement internal best-practice guidelines for native advertising distribution based upon FTC and NAD precedent. Solidify contractual obligations with third-party marketing partners. Consider Interactive Advertising Bureau and American Society of Magazine Editors Guidelines.
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This compliance series should be of interest to any company or individual engaging in Internet marketing or online lead generation, including corporate counsel.
Please contact the author if you are interested in discussing the design and implementation of preventative compliance controls that effectively walk the line between commerce and compliance, or if you are the subject of an advertising related investigation or enforcement action.
Information conveyed in this article does not purport to cover every issue associated with native advertising. Rather, it is intended to provide guidance concerning practices that may increase the likelihood that native advertising campaigns comply with applicable laws, rules, regulations and guidelines. This article is provided for informational purposes only and does not constitute, nor should it be relied upon, as legal advice. No person should act or rely on any information in this article without seeking the advice of an attorney.
