The Federal Trade Commission (FTC) released a document at the end of 2015 issuing its policy statement for native advertising — a type of advertising that matches the form and function of the platform upon which it appears. A lot of times, it takes form as either an article or video made to promote a brand while matching the style and voice of the editorial staff.
For example, below on Yahoo’s tech page are several articles to choose from. However, the article in the bottom left corner is actually an ad from Hipchat. This is indicated by the word SPONSORED listed above the headline.
The guidance document is an 11-page guide that contains detailed hypothetical examples and a discussion of which disclosures would be required in each case.
The regulator said that when labels such as “advertisement” are necessary, they have to be obvious to consumers and as close as possible to the content itself.
The FTC also said that when it comes to labeling, advertisers shouldn’t use such terms as “Promoted” and “Promoted Stories” because they are “at best ambiguous and potentially could mislead consumers that advertising content is endorsed by a publisher site.” Social networks often employ those terms.
Advertisers that fail to abide by the FTC’s instructions could be found in violation of Section 5 of the FTC Act, which bans “unfair or deceptive acts or practices in or affecting commerce.” The Interactive Advertising Bureau said in a statement that it is reviewing the FTC’s guidance, but that it has been telling its members for some time that native ads always require disclosure.
Source: “The FTC Is Cracking Down on Native Advertising” by Mathew Ingram December 23,2015