Dive Brief:

• The Federal Trade Commission is bringing some clarity to publishers’ responsibilities around native advertising with 11 pages of guidelines outlining disclosure requirements.
• The move from the FTC comes after concerns that consumers are being misled by ads that too closely mimic editorial content.
• The FTC guidelines include examples to help publishers get in compliance, including what constitutes “clear and prominent” disclosures in sponsored content.

Dive Insight:

"Regardless of the medium in which an advertising or promotional message is disseminated, deception occurs when consumers acting reasonably under the circumstances are misled about its nature or source, and such misleading impression is likely to affect their decisions or conduct regarding the advertised product or the advertising," the FTC said about native ads.

The guidelines spell out how sponsored content should be labeled with an emphasis on "ad" and "sponsored advertising content" and letting advertisers know that "promoted" and "promoted stories" should not be used as both are potentially misleading and are at best ambiguous.

Linda Goldstein, partner at Manatt, Phelps & Phillips, told the Wall Street Journal the FTC guidelines have a lot of teeth and are very specific. She added that the fact the FTC put the guidelines out is noteworthy.

"In 2016, we will begin to see cases brought in the native advertising area. I believe the FTC will use selective cases to put more meat around these guidelines," Goldstein said.

In November, Izea and Halverson found that only 8% of B2B marketers reported being fully aware or fully understanding the FTC rules on sponsored content disclosure, compared to 67% of sponsored content creators. This research and the newest FTC update follow a previous update the FTC made to a portion of its FAQ page for endorsement requirements this summer. The agency called for more direct and detailed information on social media marketing, including “clearly and conspicuously” disclosing relationships between brands and endorsers.