The FTC recently published their updated rules (and more accessible “guidance”) on what constitutes a “misleading” native advert [PDF]. I’ve read them. I only fell asleep twice. Then, near the end, a couple of bombshells.
But first, the background.
Native ads and the FTC
For those who haven’t been following the trends closely, native advertising is a form of digital advertising whereby adverts are included “in-stream,” interspersed with regular editorial content.
On social platforms, this takes the form of “promoted” posts — including stories or videos in your Facebook stream or tweets in your Twitter stream from brands you didn’t explicitly follow or “Like.” See, for example, this Coursera ad in my Facebook stream:
Native ads are particularly interesting on mobile, where the smaller screens and personal nature tend to make anything that isn’t in-stream intrusive or irrelevant.
For publishers, native advertising looks more like brand content presented as whole pages rather than as banners or advertising around the edges of the regular content. It can take the form of creative content promoting the brand, brand-funded “advertorial,” or anything in between. See, for example, this well-labelled advertorial on Autocar:
You might notice that this is actually a lot like offline magazine advertising — where “whole page takeovers” are common, and presented in the “stream” of pages that you turn as you browse. And in a similar way to the digital version, they can be glossy creative or advertorial that looks more like editorial content.
The big way that the digital world differs, however, is in the way that you find content. Most people turn pages of a magazine sequentially, whereas a lot of visitors to many web pages come from search engines, social media, email, etc. — essentially, anywhere but the “previous page” on the website (whatever that would even mean).
It’s this difference that has led the FTC to add additional regulations on top of the usual ones banning misleading advertising — the new rules are designed to prevent consumers from being misled if they fail to realize that a particular piece is sponsored.
For the most part, if you understood the spirit of the previous rules, the new rules will come as no surprise — and the newest parts mainly relate to ensuring that consumers are fully aware why they are seeing a particular advert (i.e. because the advertiser paid for its inclusion) and they are clear on the difference between the advert and the editorial / unpaid content on the publisher’s site.
At a high level, it seems very reasonable to me — the FTC wants to see clear disclosures, and will assess confusion and harm in the context of consumers’ expectations, the ways in which confusion would cause them to behave differently, and will take into account the rest of the publisher’s site:
The Commission will find an advertisement deceptive if the ad misleads reasonable consumers as to its nature or source, including that a party other than the sponsoring advertiser is its source. Misleading representations of this kind are likely to affect consumers’ decisions or conduct regarding the advertised product or the advertisement, including by causing consumers to give greater credence to advertising claims or to interact with advertising content with which they otherwise would not have interacted.
And, crucially:
The FTC considers misleadingly formatted ads to be deceptive regardless of whether the underlying product claims that are conveyed to consumers are truthful.
They summarize the position as:
From the FTC’s perspective, the watchword is transparency. An advertisement or promotional message shouldn’t suggest or imply to consumers that it’s anything other than an ad.
Subjectivity
I was interested to see the FTC say that:
Some native ads may be so clearly commercial in nature that they are unlikely to mislead consumers even without a specific disclosure.
While I think this would be risky to rely upon without specific precedents, it nicely shows more of the FTC’s intent, which seems very reasonable throughout this briefing.
Unfortunately, the subjectiveness cuts both ways, as another section says:
“...the format of [an] advertisement may so exactly duplicate a news or feature article as to render the caption ‘ADVERTISEMENT’ meaningless and incapable of curing the deception.”
It’s not easy to turn this into actionable advice, and I think it’s most useful as a warning that the whole thing is very subjective, and there is a lot of leeway to take action if the spirit of the regulations is breached.
The controversial and unexpected parts
It wasn’t until quite far through the document that I came to pieces that I found surprising. The warning bells started sounding for me when I saw them start drawing on the (very sensible) general principle that brands shouldn’t be able to open the door using misleading or deceptive practices (even if they subsequently come clean). Last year, the FTC took action against this offline advert under these rules:
Ruling that the price advertised in big red font was a “deceptive door opener” because:
To get the advertised deal, buyers needed to qualify for a full house of separate rebate offers. In other words, they had to be active duty members of the military and had to be recent college grads and had to trade in a car.
Bringing it back to web advertising, the Commission says:
Under FTC law, advertisers cannot use “deceptive door openers” to induce consumers to view advertising content. Thus, advertisers are responsible for ensuring that native ads are identifiable as advertising before consumers arrive at the main advertising page. [Emphasis mine]
If you understand how the web works, and how people find content on publishers’ sites these days, this will probably be starting to seem at odds with the way a lot of native advertising works right now. And your instincts are absolutely right. The Commission is going exactly where you think they might be. They title this set of new rules “Disclosures should remain when native ads are republished by others.”
Social media
In the guidelines document, the Commission includes a whole bunch of examples of infringing and non-infringing behavior. Example 15 in their list is:
The … article published in Fitness Life, “Running Gear Up: Mistakes to Avoid,” … includes buttons so that readers can post a link to the article from their personal social media streams. When posted, the link appears in a format that closely resembles the format of links for regular Fitness Life articles posted to social media. In this situation, the ad’s format would likely mislead consumers to believe the ad is a regular article published in Fitness Life. Advertisers should ensure that the format of any link for posting in social media does not mislead consumers about its commercial nature. [Emphasis mine]
Now, it’s obviously really hard to ensure anything about how people post your content to social media. In the extreme case, where a user uses a URL shortener, doesn’t use your title or your Open Graph information, and writes their own caption, there could be literally nothing in the social media post that is in the control of the advertiser or the publisher. Reading this within the context of the reasonableness of the rest of the FTC advice, however, I believe that this will boil down to flagging commercial content in the main places that show up in social posts.
Organic search
Controlling the people who share your content on social media is one challenge, but the FTC also comments on the need to control the robots that display your content in organic search results, saying:
The advertiser should ensure that any link or other visual elements, for example, webpage snippets, images, or graphics, intended to appear in non-paid search results effectively disclose its commercial nature.
...and they also clarify that this includes in the URL:
URL links … should include a disclosure at the beginning of the native ad’s URL.
Very sensibly, it’s not just advertisers who need to ensure that they abide by the rules, but I find it very interesting that the one party noticeably absent from the FTC’s list is the publishers:
In appropriate circumstances, the FTC has taken action against other parties who helped create deceptive advertising content — for example, ad agencies and operators of affiliate advertising networks.
Historically, the FTC has maintained that it has the authority to regulate media companies over issues relating to misleading advertising, but has generally focused on the advertisers; for example, when talking about taking special measures to target a glut of misleading weight loss adverts:
“...the FTC said it does not plan to pursue media outlets directly, 'but instead wants to continue to work with them to identify and reject ads with obviously bogus claims' using voluntary guidelines.”
In the case of native advertising, I am very surprised not to see more of the rules and guidelines targeted at publishers. Many of the new rules refer to platform and technical considerations, and elements of the publishers’ CMS systems which are likely to be system-wide and largely outside the control of the individual advertisers. Looking at well-implemented native ads released prior to these new guidelines (like this one from the Telegraph which is clearly and prominently disclosed), we see that major publishers have not been routinely including disclosures in the URL up to now.
In addition, individual native ads could remain live and ranking in organic search for a long time, yet the publisher could undergo redesigns / platform changes that change things like URL structures. I doubt we’d see this pinned on individual advertisers, but it is an interesting wrinkle.
Checklist for compliant native advertising
Clearly I’m not a lawyer, and this isn’t legal advice, but from my reading of the new rules, advertisers should already have been expecting to:
- Ensure you comply with all the normal rules to ensure that your advert is not misleading in content including being sure to avoid “deceptive door openers”
- “Clearly and prominently disclose the paid nature” of native adverts — it is safest to use language like “Advertisement” or “Paid Advertisement” — and this guide has detailed guidance.
In addition, following the release of these new rules, advertisers should also work through this checklist:
- The URL includes a disclosure near the beginning (e.g. example.com/advertisement/<slug>)
- The title includes a disclosure near the beginning
- The meta description includes a disclosure
- All structured data on the page intended to appear in social sharing contains disclosures:
- Open Graph data
- Twitter cards
- Social sharing buttons’ pre-filled sharing messages
- Given the constraints on space in tweets especially, I would suggest this could be shorter than in other places — a simple [ad] probably suffices
- Links to the native advert from elsewhere on the publisher’s site includes disclosures in both links and images
- Embedded media have disclosures included within them — for example, via video and image overlays
- Search engines can crawl the native advert (if it’s blocked in robots.txt, the title tag and meta description disclosures wouldn’t show in organic search)
- Outbound links are nofollow (this is a Google requirement rather than an FTC one, but it seemed sensible to include it here)
And it seems sensible to me that advertisers would require publishers to commit to an ongoing obligation to ensure that their CMS / sharing buttons / site structure maintains compliance with the FTC regulations for as long as the native advertising remains live.
Conclusion
There are elements of the new requirements that seem onerous, particularly the disclosure early in the URL which could be a technically complicated change depending on the publisher’s platform. I have looked around at a bunch of major publisher platforms, and I haven’t found a high-profile example that does disclose all advertorials in their URLs.
It also seems likely that full compliance with all these requirements will reduce the effectiveness of native advertising by limiting its distribution in search and social.
On balance, however, the FTC’s approach is based in sound principles of avoiding misleading situations. Knowing how little people actually read, and how blind we all are to banners, I’m inclined to agree that this kind of approach where the commercial relationship is disclosed at every turn probably is the only way to avoid wide-scale misunderstandings by users.
I’d be very interested to hear others’ thoughts. In particular, I’d love to hear from:
- Brands: Whether this makes you less likely to invest in native advertising
- Publishers: Whether these technical changes are likely to be onerous and if it feels like a threat to selling native ads
I look forward to hearing your thoughts in the comments.
Great post and a clear analysis of the new FTC guidance.
I can't imagine advertisers complying with all that disclosure in URLs and across social media.
I've seen studies that say something like 8% of consumers realize that a native ad is actually an ad. And that's exactly what the native industry wants. The whole point of native advertising is to get people who would not click on a banner to click anyway -- otherwise the native ads would be banners.
'Banner blindness' exists because people don't want to read marketing when they came to the site for content. Historically, marketing has been so bad – poorly targeted, lousy creative, no relevance – that we've all learned to turn it off.
The solution to banner blindness is marketing that delivers real value, so banners (clearly marked ads, as opposed to subtly marked native ads) would, over time, people might actually want to click on them. Instead of doing that hard work, publishers and brands conspire to slide us from an editorial environment to an ad with as little friction as possible. Transparency increases friction.
I've seen a lot of tweets that say something like, "Forbes: Top Ten Widgets!" -- when I click, I see that it isn't Forbes at all, it's someone who paid Forbes. And so a brand that was built on trust, authority, independence and transparency is now an advertorial factory.
Publishers are selling their crown jewel – reader trust – and selling it cheap.
Appreciate your insights on this, Doug.
One problem with this:
"Instead of doing that hard work, publishers and brands conspire" [emphasis mine]
Is that I don't think it's a conspiracy - unfortunately I think it's something more like the prisoner's dilemma (with millions of players): if an advertiser "defects" by making a clickbait, gaudy, or misleading banner, then the rest of the market loses if they don't respond; but if they do respond, then we get a race to the bottom and the banner-blindness you mention.
I'm not sure the solution is as easy as individual advertisers taking responsibility for making better ads...
Agreed. Not a conspiracy -- more like panic.
Better marketing is a start. Total transparency is a step!
"Lie to me once shame on you, lie to me twice, shame on me."
True - probably some publishers can reject some apps as inappropriate or irrelevant to media or visitors. And race to the bottom is brilliant example what will happen if some ads wasn't rejected.
Thanks for the article, I really didn't feel like reading the FTC rules and this is just enough to keep me updated, at least for now.
I'm working at a marketing department for a product that's currently building a brand image on the western market (at least tries to), I don't think that rules will change anything for us, we've had experience with native advertising and always made sure that our "plug" is relevant to the article, benefits the reader and can't be substituted for something that does the job for free.
Great and balanced post, Will.
And an interesting comment, Doug, though I do disagree with you on a point or two.
Firstly the whole notion of deception being the goal. If you think about it none of the four stakeholders want it.
The readers are obviously not interested in being deceived. The authorities, like the FTC, live to protect the consumers so they don’t approve. Media companies (contrary to what you might think) value their the reader’s trust too much to risk losing it - and finally the brands have no real interest in cheating their (potential) customers.
The days of tricking modern consumers to do anything they don’t want to are over. So as an advertiser you won’t win anything in the long run by getting people to click on something that they are not interested in. Pardon my language but it’s like p… your pants on a cold December day because they’ll turn against you as soon as they figure out what you are doing.
Now, I agree that some advertisers and media companies fall into the trap of going after click results in the short run. The media companies are so financially stressed that they might make some wrong decisions right now. But all the serious publishers that I speak to all over the Globe are looking to solve this.
And smart companies that are in this for the long run will use this just as little as they will use old school black hat techniques.
It’s early day in Native Advertising. Give it a little time and I’m convinced it will turn into a discipline that will bring value to both readers, brands and publishers. Remember, content marketing that you and I love so much didn’t get it right straight away. Nor will this.
And speaking of content marketing it’s similar to native advertising in so many ways:
Both are about creating relevant, valuable and engaging content to a clearly defined audience with the objective of driving profitable customer action. One is mainly done on the brands owned properties, the other on platforms you rent.
Both takes time to work properly, both industries have tons of people getting it wrong by dressing brand centric messages up like something of value to the audience.
And both have stars getting it right. Which means bringing real value to the audience, to the brand and to the publishers. In the long run.
Thanks for the response.
On the idea that advertisers and publishers don't want to deceive - I really, really wish that were true.
I agree it's not in their long-term interests but this is short-term panic.
For the record, I do think there are publishers and brands doing native with integrity. But the default setting is still disguise.
That's why they call it 'native advertising' -- it's advertising attempting to go native (blend in with the editorial).
(Whoever coined that term should have thought harder and come up with a euphemism like 'Enhanced Content' instead of a naked truth!)
So... about that checklist? A checklist is what got me to click, but I was presented with an essay instead.
This line: "It also seems likely that full compliance with all these requirements will reduce the effectiveness of native advertising..."
Totally agree. If you haven't seen John Oliver's piece on native advertising, I highly recommend it:
https://bit.ly/1smwuD9
I think native advertising remains very confusing for advertisers - plenty of marketers still think native means paid ads driving to articles rather than lead gen pages, and plenty of publishers and platforms are offering "native advertising" as a programmatic service, when they really offer nothing more than contextually relevant banners (https://advertise.bingads.microsoft.com/en-us/bing-...)!
Seeing more brands be more compliant will help to raise awareness of FTC regulations overall, and will benefit the public as well.
Thanks for that fantastic article!
Sounds good to control misleading advertising, in fact there is a lot. But then I think that some advertising very well made and very original could be classified as misleading when really it is not
I thought this advertisment thing was more controled... And about the banners, is people still seeing them? Because I really think that most of them are being ignored by our brain already. Amazing post btw :)
You know I have a tendency to read great blog post like these and fail to say anything to the author. This year I'll try not to do that as much.
Great post, thanks for suffering through the legal mumbo-jumbo and digesting it in a "what we need to know" way.
Cheers,
Don
Thanks for sharing this checklist. This helps to the company for creating the native advertising.
Since writing this, I've come across my first example of disclosure in the URL in the wild (in the title as well):
https://paidpost.nytimes.com/netflix/women-inmates-separate-but-not-equal.html
This is really nicely done - good work NYT and Netflix!
It's interesting to note that the page https://paidpost.nytimes.com/ does not exist (404), but that individual posts are indexed by Google [site:paidpost.nytimes.com] - there's quite a range of content quality from things like the Netflix piece at the top end to undifferentiated recipes etc.
Thanks for sharing this example, which really frames compliance well.
I'm curious about your thoughts on how it also demonstrates a clear division of efforts; in that all the content is blocked from crawl.
With sites basing their value, and consequently what they can charge for advertising, on the sum of their monthly traffic, wouldn't this approach over time be like sawing off your legs? Or maybe your feet? I'm curious about how much organic search traffic out there is currently generated by paid posts. Maybe its small, but maybe not. Would love to hear some opinions.
On the other hand, I'm assuming that the content being placed on a blocked subdomain suggests concerns over the broader implications of poor click-through as a result of the disclosure in the URL. Kind of smart if you wanted shield this from higher value search content.
Thanks for the update guys. We have a few clients in the USA now so its always good to be kept up to date.
Perfect examples! Thank you so much!
There is something unclear here! The FTC is concerned that consumers won’t be able to distinguish advertising from other content, as native advertising evolves. Some national and many local publishers have to change what they’re doing. Please help!
Thanks for posting such nice article related to native marketing.It is very helpful and effective,of what you shared .Native advertising has been around for a patch now. “Pay-to-play” content began appearing in newspapers (and later over the airwave) as early as the 1910s.For more details refer https://smstudy.com/Article/going-native
Shouldn't it be down to the publisher to let others know the difference between sponsored content and editorial content that's displayed on the publishers site? Or have a missed something on this article?
Well yes - it's clearly only the publishers who can actually implement these things. It seems, though, that the FTC puts this obligation on the advertisers - who then have to ensure that they either advertise on platforms that are compliant already, or that they specify these things in their contracts with publishers.
Yes, it's quite a double barrel situation for advertisers in general here. They have to comply, there publishers need to comply and the advertisers need to make sure everyone complies before the advert goes out to all the publishers.... *head hurts now*
So what would happen if the publisher didn't make it clear the content was sponsored? Apart from being penalized by Google I mean.
This isn't a Google thing - it's an FTC thing. They at least have the power to fine, and I imagine that might escalate even further. They apparently settled this recent offline case.
Will - from a legal perspective, the FTC doesn't feel the need to specifically target publishers. If a publisher violates the FTC's rules, the FTC will go after the advertiser first and let the advertiser go after the publisher later (this is one reason you should be aware of your indemnity obligations in any contracts you sign as a pub). Government regulators use this tactic to avoid a "whack-a-mole" problem. There are tens of thousands of publishers and many are small operations--it's nearly impossible to police that kind of industry. But larger brands who USE those publishers to advertise, they make better targets for state and federal regulatory action.
Really helpful checklist. As a publisher who currently runs native ads (on gooverseas.com), I'm definitely concerned with how these new rules will make it harder for our native ads to have the success and reach that they've had previously.
Revenue aside, I'd actually be anxious about losing this connection since our native ads have been a great source of collaboration and fresh content ideas from other industry experts. Any thoughts on non-native ad methods of keeping up these partnerships and collaborations??
Thanks for the articleWill. Native ad's is unfortunately in my opinion taking over the space on many sites on the web. I think it dumbs down many of the good news websites. I live in Melbourne Australia and it saddens me to see many of the good newspaper agencies (like https://www.theage.com.au) have been stooping to these sort of attention grabbing media tricks. Viewer engagement can offer so much more when it is done well.
Does anyone know if we get effected by the FTC rules if we're an Australian business marketing in the USA?
Hey Will, Great Post Man.. Nice Guide for Native Ads.
I find this topic to be very difficult to understand. It does not matter if I am reading information published by the FTC or any other author.
It is like being presented with a white to black color gradient and trying to decide which shade of gray is where the problem begins. And, that is a gross oversimplification because instead of being a two-dimensional gradient, there are many dimensions, some of which are unknown, unexpected, and/or obscure.
The publicity we received, especially on social networks should pass stricter filters to define what is false advertising
This is great and importent post for all publics.
Nice Guide for Native Ads. Thanks for sharing this checklist. This helps to the company for creating the native advertising. Thanks for article