Seller Beware - Broadcasting & Cable

Seller Beware

Native ads that deceive by failing to adequately disclose are in the FTC’s crosshairs
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Related: Political Ad Disclosure Not on FCC’s Docket

Regarding the hot-button issue of advertising disclosures, “native” advertisers should be forewarned: The government has its eyes on you.

The Federal Trade Commission late last month issued new guidelines for native advertising meant to help advertisers and media outlets figure out what kind of disclosures they need to put on such ads, especially when they resemble the news or entertainment content in which they are placed.

But it also served as a warning that native ads that deceive by failing to adequately disclose are in the agency’s crosshairs. ”A basic truth-in-advertising principle is that it’s deceptive to mislead consumers about the commercial nature of content,” the FTC said. And truth of a claim is no defense if it is an ad masquerading as an independent endorsement.

“The FTC considers misleadingly formatted ads to be deceptive regardless of whether the underlying product claims that are conveyed to consumers are truthful,” the commission said.

The FTC put out revised guidelines on green marketing claims, and followed those up with a raft of actions targeting environmental marketing. It updated its endorsement guidelines and then brought actions.

The guidance on native ads could follow the same pattern.

An FTC source speaking on background said the commission puts out such guidelines for a reason—in this case, for marketers to read them—closely—and make sure they are complying. The source said they could not guarantee the guidance would be followed by actions against marketers, but pointed out that the FTC is an enforcement agency. It has not brought any cases related to native advertising online, but the source pointed out that was because it was a relatively new category.

For examples of what the FTC thinks is in bounds and out of bounds in the native advertising space, go to broadcastingcable.com/Jan11.

Related: Political Ad Disclosure Not on FCC’s Docket

Regarding the hot-button issue of advertising disclosures, “native” advertisers should be forewarned: The government has its eyes on you.

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