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. Mr. Hutchins started his legal career in Cheyenne, Wyoming as a law clerk for the district court judges. Mr. Hutchins then entered private practice with a Wyoming based litigation and business law firm. Later, Mr. Hutchins went to Alaska, where he was the chief litigator for a firm that engaged in bond law, corporate law, securities law, and municipal law. The State of Wyoming hired Mr. Hutchins from Alaska to represent the State of Wyoming in the national tobacco arbitration and act as its tobacco settlement attorney. While in that position, as a hobby, he developed an enforcement unit for consumer protection for Wyoming residents. Mr. Hutchins moved to Colorado in 2016 and founded Harmony Law, LLC. Harmony Law is primarily engaged in civil litigation. It is also a general practice firm in the areas of business law, estate planning, consumer law and family law. Harmony Law is active in all state and federal courts throughout Wyoming and Colorado.


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