Native Advertising Compliance – What Every Marketer Must Know

Native advertising compliance could mean walking a rather slippery slope. The field of native advertising is developing quickly. As new ideas and marketing techniques emerge within the industry, questions naturally arise about what is appropriate and what is not. Worse, there are some techniques that may fringe on downright illegal.

A marketer trying to understand the native advertising landscape would do well to keep the ethical guidelines issued by the Interactive Advertising Bureau and the American Society of Magazine editors in mind. They should also pay close attention to the legal guidelines issued by the US government’s Federal Trade Commission.

Thus far, the Federal Trade Commission (FTC) has not claimed or acted as through native advertising is deceptive. This is good for true native marketers who know that native advertising is not designed to be deceptive or fraudulent.  

The Native Advertising Landscape

There are many forms of native advertising, with new formats being developed daily. There is no simple definition for what construes native advertising. But essentially, it is a form of marketing that is designed to provide the reader or viewer an uninterrupted experience through sponsored content. This content can include editorials, videos, search ads, sponsored articles, and much more. 

A comprehensive list of native advertising techniques is found in the IAB Advertising Playbook. This guide was released by the Interactive Advertising Bureau in 2013 and contains six main categories of native advertising including examples and standard practices.

A marketer can use the Playbook to frame ads or work through a checklist to ensure he falls within the ethical guidelines native advertising is establishing. The Playbook also outlines the form and function of different ads including a variety of formats, website integration and ways to measure the productivity of the ads.

Ethical Guidelines of Native Advertising

One of the recurring themes in the IAB Playbook is the need for marketers to use proper disclosures. Viewers should be able to easily tell the difference between sponsored or paid advertising and published content.

Another organization concerned with the ethical guidelines of native advertising is the American Society of Magazine Editors (ASME). While only some forms of native advertising fall into the traditional media of magazines and content-rich websites, the guidelines established by the society are relevant to all forms of native marketing.

The ASME states that regardless of platform or format, the difference between marketing messages and editorial content should be clear to the average reader. Sound familiar? The ASME goes further and says that ethical boundaries prohibit editorial endorsement in exchange for payment. In short, a publisher should not take money to write a glowing review of a product.

The ASME also states that marketers and editors should follow the Federal Trade Commission regulations as well, especially on websites that contain a variety of content. Publishers should clearly separate advertising from user-generated, aggregated and traditionally published content. Additionally, any advertisements that create the “look and feel” of the publication should be avoided as they may deceive readers.

The Legal Requirements of Native Advertising

The FTC has been increasingly focused on native advertising regulations in the past several years. It is the publisher and marketer’s responsibility to keep up with the current guidelines, but, generally speaking, the FTC is most concerned when marketing “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”. In cases like this, “the Commission is of the opinion that it will be necessary to clearly and conspicuously disclose it is an advertisement.”

Remember that there are six distinct areas of native advertising  – including emerging technologies. This variety means staying in the legal limit entails staying not just in the letter of the law, but in the spirit of the law as well.

Fortunately, the spirit of the law is straightforward. Never appear to intentionally deceive a customer.

The FTC states: “Under the FTC Act, an act or practice is deceptive if there is a material misrepresentation or omission of information that is likely to mislead the consumer acting reasonably in the circumstances.”

In short, the key to native advertising compliance is transparency. Customers should be able to easily differentiate between published content and an ad. This is usually done through placement on the page and through labeling.

This is the primary goal of the FTC and will be its main inquiry into questionable activities. Therefore it should be your primary question with each ad you place. In short, the FTC doesn’t care very much about what is in the advertisement – provided it doesn’t break other laws – but they care a great deal about how the ads are displayed and labeled.

Overall Net Impression

The FTC considered the “overall net impression” of an advertisement. This means that you can’t slap a tiny “sponsored” label off to the side of an ad and be in good standing. If your labels aren’t clear, you could be in big trouble.

The FTC’s argument is that reasonable consumers read the headline and not the fine print. For this reason, tiny labels, inconspicuous fonts, and phrases like “you may also like this” might be considered over the line. The IAB native advertising playbook includes commonly used disclosure language for identifying advertisements. Following the industry standards in a clear, honest way should keep you in good standing with the FTC.

Disclosures and Context

That being said, there is no single phrase or magical I’m-Good-With-The-FTC disclosure you can use. The myriad forms of native advertising and the individualized nature of every ad means you must consider the placement and labeling individually.

Phrases like “brought to you by” send the message that the sponsor has provided widespread support for the publication or the content itself. On the other hand, variations of “advertisement” and “sponsored content” show a clearer link between a native ad and a company or brand. Phrases like “suggested post” fall into a gray area and should be used sparingly – if at all.

While correctly phrased disclosures are essential, native advertising regulations also require native advertisements to be separated from editorial content. This can be achieved by moving ads to a separated, grouped space. It can also be achieved by using borders and shading. For example, in-feed native advertising will include a clear label as an advertisement. It will also typically be set off by a border or clearly shaded area so that it is visually separated.

Remember, it’s the “overall net impression” that matters most – can a customer clearly see what is sponsored and what is not?

Intellectual Property Law

It’s worth mentioning that all native advertising, regardless of intent and message, should consider fair use and intellectual property laws as well. Be sure that native advertisements don’t infringe on privacy rights or use third party materials illegally. All rights, including copyright, should be licensed and attributed in native advertisements as they would be in any other form of content.

Who Is Responsible for Native Advertising Compliance?

The FTC isn’t interested in splitting hairs when it comes to breaking regulations. Traditionally, the FTC did not always hold publishers accountable for violations if they just distributed misleading advertisement. Native advertising may be different.

If a publisher helps in the creation of the native advertisement, the publisher and the marketer may be found at fault by the FTC. This puts the onus of responsibility on both the marketer and the publisher of the native advertisements. This is especially true if the publisher had any part in the creation of the advertisement.

Native Advertising Best Practices

The legal and ethical boundaries of native advertising are decidedly complex. But the best practices of native advertising are relatively straightforward.

  •  Advertising content should be clearly, visibly distinguished from editorial content.
  • Collections of sponsored links should be grouped, separate and clearly labeled as being sponsored or advertisements.
  • Sponsored content should never closely mimic the publication with the intent to deceive.
  • Choose your font carefully so that it is large, bold and visible in the “overall net impression.”
  • Native advertising disclosures should appear where customers are likely to look first.
  • State advertising clearly – avoid “You may also like this” or “suggested post.”
  • Place disclosures in text in front of or above the headline of the native advertisement.
  • Advertising labels should remain with the native advertisement when it is republished by others.
  • Avoid technical jargon or misleading language in advertising disclosures.
  • All native advertisements must include identifying language, even if the ad does not include traditional advertising messages.
  • Develop in-house best practices in line with legal and ethical considerations, but always treat each ad individually.
  • Ensure all use of third-party materials and rights are legal and ethical.
  • Use compliance contracts between publishers, marketers and third parties.
  • Consider seeking legal advice to review and ensure FTC compliance of all ads and content.

What do you think of the native advertising guidelines? How do you preserve transparency? Drop us a line!

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