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The Lowdown on the FTC’s New Native Ad Regulations

3 MINUTE READ | January 7, 2016

The Lowdown on the FTC’s New Native Ad Regulations

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Kristen Bennett

Kristen Bennett has written this article. More details coming soon.

If you’re at all familiar with Native advertising, which is increasingly becoming a hot topic among both advertisers and publishers alike, you’ve likely heard that the FTC recently cracked down and issued stricter guidelines for native ads, due to the fact that it is not always simple for users to differentiate advertising from other content, leading to deception.

One of the main upsides of Native advertising is its ability to be seamlessly integrated with non-advertising content on a publisher’s page, but consumers are increasingly being ‘tricked’ by the ads due to a lack of full disclosure on the part of the publishers.

Hence, the FTC issued new regulations in December 2015, which force publishers to be more transparent, in order to combat consumer’s growing frustrations with the ads.  Some publishers will need to change their standard practice in order to comply with the new regulations.  According to this DigiDay article, the biggest offenders of the new guidelines are content recommendation engines, such as Outbrain and Taboola, who recommend stories to users; however, sites like the New York Post and BuzzFeed will also need to review their Native ad policies per the new guidelines.

Todd Krizelman, co-founder and CEO of MediaRadar, said that only 30 percent of publishers are in compliance with the FTC’s new guidelines that address how ads are labeled, visibility of sponsor name, and prominence of the label.  In fact, 26 percent of websites run native without mention of the sponsor at all, his data show.

See below for a summary of the new regulations to keep in mind:

  • In considering whether a Native ad complies with guidelines, the FTC will consider an array of factors including the ad’s overall appearance, the similarity of its language, visuals and subject matter to non-advertising content on the publisher site, and the degree to which it is distinguishable from other content on the publisher site.

  • Native ads typically appear on the main page of a publisher’s site and consist of a headline, often in tandem with a thumbnail image and short description and if clicked/tapped, leads to additional advertising content. Publishers are now responsible for making it clear to users that native ads are identifiable as advertising BEFORE consumers arrive at the main advertising page.

  • The FTC recommends that publishers use words like “ad” or “sponsored advertising content” and avoid labels like “promoted” or “promoted stories”, which can be misleading to consumers. However, if a publisher is using the advertiser name in the label “Promoted by [advertiser name here]”), that is permissible.

  • The disclosure labeling a post as an advertisement must be placed near the headline, in order to avoid on confusion on the part of the consumer.

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In short, a large majority of publishers will need to rethink their current Native policies to accommodate the new FTC regulations.  While advertisers may be disappointed by the fact that the ads will no longer be quite as – well, native – it’s time that we hear and respond to the voices of the frustrated consumer.

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