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FTC Issues New Rules for Native Advertising on the Internet

Regulating deceptive ads in the digital age.

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The Federal Trade Commission today unveiled its rules for how native advertising on the Internet has to look, spelling out what qualifies as deceptive and what doesn’t.

The FTC’s “Enforcement Policy Statement on Deceptively Formatted Advertisements” is a wonky 16-page document that fundamentally affirms what the FTC has already said about deceptive advertising more generally. Here’s the part that best sums up its message:

“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.”

Native advertising, also called sponsored content, is an ad that’s dressed up to look like editorial material, but theoretically has a clear designation that distinguishes it from editorial content.

For a number of digital media companies, native advertising has become a vital revenue stream that isn’t tied to the whims of Facebook traffic. Gawker Media pulls in a third of its revenue from native ads, and digital heavyweights like BuzzFeed and Vox Media* have established in-house ad agencies to focus on crafting the stuff.

A number of years ago, before Facebook completely overwhelmed digital media publishers, there was a grand debate about the ethics of native advertising and sponsored content.

Some people, like since-retired blogger Andrew Sullivan (an influential former magazine editor with a small but dedicated following) said that advertising had “defeated” journalism and that ads mimicking editorial content were journalism’s death knell. By and large, people don’t argue about this anymore because it appears that everyone stopped caring about ethics in advertising. Just kidding! It was actually because people started to experience platform anxiety about Facebook, which makes native advertising seem much more palatable by comparison to many journalists and media critics.

The FTC’s policy statement touches on all of this, which is weirdly self-aware for a government document. There’s also a guide to the enforcement standards for businesses, and a press release here. The FTC approved the new rules by a vote of 4-0.

* Vox Media owns this website.

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