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The Federal Trade Commission's view of Native Advertising

Posted by Clyde Hutchins | Jul 26, 2016 | 0 Comments

The Federal Trade Commission (FTC) recently issued guidance on how to ensure that "native advertising" is not deceptive to consumers. "Native advertising" is when an ad resembles the design and style of the media in which it is presented. "Native advertising" is becoming more and more popular in online media. Examples appearing online include some news feeds, where advertising will be inserted part way down the page, but made to look like another news story. Likewise, in some search engines, ads will appear along with the search results. These are both examples of online "native advertising."

According to the FTC, in some cases native advertising may be a deceptive act or practice. It depends upon whether the wording and presentation of the ad misleads consumers about the commercial nature of the content. Does the consumer understand that it is an ad and not part of the contextual media?

The FTC advises businesses to disclose the commercial nature of the native ad if consumers are likely to confuse it with the contextual media. As the FTC notes, "[t]he more a native ad is similar in format and topic to content on the publisher's site, the more likely that disclosure will be necessary to prevent deception."

The natural question that follows from this is what should advertisers do to ensure disclosures in native advertising is sufficient? The FTC provides general guidance on this issue. The disclosures should be, (1) clear and unambiguous; (2) as close as possible to the native ad to which they relate; (3) in a font and color that's easy to read; (4) in a shade that stands out against the background; (5) for video ads, on the screen long enough to be noticed, read and understood; and (6) for audio disclosures, read at a cadence that's easy for consumers to follow and in words consumers will understand.

The FTC goes on to present more details on the placement and presentation of disclosures for "native advertising." Generally speaking, it appears that the FTC's aim is to ensure that consumers understand that the native ads are in fact commercial advertising and not part of the surrounding media on the website. If you are an advertiser and would like for a trained eye to review your advertising for compliance with consumer protection law, please feel free to contact Harmony Law. We are here to help.

About the Author

Clyde Hutchins

Clyde Hutchins is the founder of Harmony Law. Prior to opening Harmony Law, Mr. Hutchins worked in the Wyoming Attorney General's Office for several years where he developed a strong consumer protection enforcement unit. In that position he led over 120 investigations and enforcement actions under the Consumer Protection Act. He worked on numerous joint cases with the Federal Trade Commission and other states, including Colorado, on consumer protection matters. Mr. Hutchins is also a contributing author to Consumer Protection Law Developments, Second Edition. Previous to his work in the Attorney General's Office, Mr. Hutchins was in private practice in Anchorage, Alaska where he was the chief litigator for a firm. Mr. Hutchins represented municipalities on various matters. Mr. Hutchins provided counsel to businesses and investment advisors regarding compliance with securities laws. He was also a bond lawyer and worked on municipal financing matters. Prior to that, Mr. Hutchins practiced civil litigation with a law firm in Cheyenne, Wyoming. Mr. Hutchins devotes his spare time to his family, traveling and enjoying the great outdoors.

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Harmony Law is one of the few law firms in Colorado and Wyoming that focuses on consumer law. Mr. Hutchins is a member of the National Association of Consumer Advocates and state chair for Wyoming. If you have a consumer law issue, please feel free to call 970-488-1857 and speak with Mr. Hutchins.

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