FTC warns publishers of their liability for deceptive native advertising

The Federal Trade Commission (FTC) has sent a warning out to publishers that they must be transparent by clearly labeling native advertising so consumers can recognize it for what it is.

Native advertising is “an old concept”,said Mary Engle, associate director for advertising practices at the FTC, and something the Commission has long had concerns about. However, with native advertising becoming an increasingly effective way of reaching consumers, the FTC has the format in its spotlight.

While no formal guidelines have yet to be released by the FTC for native advertising, several workshops have been held in the past to educate publishers on advertising disclosure.

Traditionally, publishers have not been held responsible for misleading ads as content was created by ad agencies. However,with more publishers creating content themselves, Engle says they are to be held liable.

Furthermore, the FTC has warned that simply having a “sponsored” label attached to the native advertising content won’t cut it. It must be visible enough that even consumers that only look at the headline will be informed it is advertising content.

Engle clarified that an ad is deemed deceptive if it misleads a significant percentage of consumers, by which she means 15%, or sometimes as low as 10%.