FTC Warns Content Publishers of Liability for Deceptive Native Ads

Peter Roesler, President - Web Marketing Pros

By Peter Roesler

President, Web Marketing Pros

advertising-word-cloudFor website owners and content publishers, one of the greatest challenges is monetizing the content they produce. And since content publishers get paid more when people click on the ads displayed on their site, website owners have an incentive to use ad formats that try to trick consumers into clicking on the ad. Native ads are commonly accused of such trickery because they rely on looking like links to regular content. Recent comments from the Federal Trade Commission suggest the agencies will start holding content publishers more responsible when deceptive native ads are shown on their site.

As was discussed in a previous article on this site, “native ads” is a generic term used to describe ad formats where the content looks like articles from another website, usually with sensational titles. Native ads are highly targeted to the page they are found on. For example, a user on a business-related website might see native ads that look like links to articles about the housing market or hot stock tips. Most have headlines like “High School Graduate Makes Millions with Fool Proof Investment Strategy” or “[Famous Person] Warns of Huge Economic Crisis Within 6 Months”.

These kinds of ads appeal to people who are naive enough to not realize they aren’t real articles), desperate enough to try anything, or curious to see what kind of nonsense the ad is really selling. Content publishers like them because people do click them, and advertisers like them because bring traffic to their landing page. However, most consumers don’t like native advertising and the FTC isn’t laughing either.

“For us, the concern is whether consumers recognize what they’re seeing is advertising or not,” Mary Engle, the FTC’s associate director of advertising practices, at the Clean Ads I/O conference, according to media reports of the event

The FTC has always gone after deceptive advertising, whether it’s been in print, over the radio waves, or on television. Finding offending ads in the digital age can be challenging because the ads are shown to far fewer people, which gives them less opportunities to hear from consumers about illegal ads. The other difference is that content publishers have more control over how are displays on their sites, so the FTC feels they carry more responsibility than the traditional media outlets when an ad is displayed in a deceptive way.

“But when the publisher is creating the content, they’re more involved in the process, and that creates some potential liability,” Engle said, according to AdExchanger.

The FTC isn’t suggesting that all native ads are deceptive, but website will need to use a clearer way of identifing what is an ad and what is traditional content on the site. Traditional methods like using a small tag that says “Sponsored” or “You Might Also Like” will probably not cut it for the FTC when deciding if native ads are properly labeled.

Though no official guidelines were shared, the FTC representatives at the conference said they considered native ads that misled 15 percent of the viewers, and in some cases as low as 10 percent, as deceptive for their purposes. To think of it another way, if one person out of seven clicks a native ad thinking it’s a legitimate link, then the ad is probably deceptive. The FTC didn’t say what kinds of penalties they would hand down to sites that used misleading native ads, but it’s probably something webmasters don’t want to learn from experience.

This may all sound very aggressive on the part of the FTC, but this isn’t an all-out war on native ads. Engle even went as far as to say the native ads are no better or worse than other advertising methods.

“Some people I’ve talked to [think] native is inherently deceptive,” Engle said. “I don’t agree. I don’t think it’s inherently deceptive any more than an infomercial is inherently deceptive.”

Website owners should check their sites to make sure that all ads are clearly labeled as such, especially if the ads use a news story style format.

Check out this article for earlier statements from the FTC on the dangers of native ads.


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