Marketers and publishers are using innovative methods to create, format, and deliver digital advertising. One form is “native advertising,” content that bears a similarity to the news, feature articles, product reviews, entertainment, and other material that surrounds it online.
But as native advertising evolves, are consumers able to differentiate advertising from other content?
The Federal Trade Commission Act prohibits deceptive or unfair practices. It’s the FTC’s job to ensure that long-standing consumer protection principles apply in the digital marketplace, including to native advertising.
The FTC has issued an Enforcement Policy Statement on Deceptively Formatted Advertisements that explains how the agency applies established truth-in-advertising standards in this context.
This Guide for Businesses supplements the Enforcement Policy Statement by offering informal guidance from FTC staff to help companies apply the Policy Statement in day-to-day contexts in digital media.
The first part of this Guide summarizes the consumer protection principles that serve as the foundation for the Enforcement Policy Statement.
The second part includes examples to explain how effective disclosure can help prevent deception.
The third part features staff guidance on how to make clear and conspicuous disclosures within the format of native advertising.
Of course, this Guide can’t cover every issue associated with native advertising. Nor does it provide a safe harbor from potential liability under Section 5 of the FTC Act. These examples are only general guidance for advertisers.