Native Advertising Is blurry, but Disclosures Must Be Clear

By: Sheila Raftery Wiggins

“Native advertising” is an advertisement that may blur the distinction between advertising and editorial, video or other content. For example, an advertisement may be integrated into a newspaper website, with a “headline” and then a few lines of text which looks like a regular story rather than looking like an advertisement.

Native advertising is so effective with consumers that it is also a hot topic with the Federal Trade Commission (“FTC”). The FTC may deem an advertisement that looks like an ordinary news article to be deceptive if consumers are not provided with sufficient information to differentiate the advertisement from publisher-generated, non-advertising content.  This information may be inherent in the nature of the advertisement, or it may require a separate disclosure indicating that the advertisement is a marketing communication.

Be careful, and abide by the FTC’s guidance, including the FTC’s Enforcement Policy Statement on Deceptively Formatted Advertisements, to avoid deception. The Enforcement Policy states that “an ad is deceptive if it promotes the benefits and attributes of goods and services, but is not readily identifiable to consumers as an ad.” The FTC’s guidance lists 17 mini case studies that provide examples of what does and does not require a disclosure.

GOAL: The goal is whether the consumer can reasonably ascertain that the advertisement is paid marketing material.

LESSON: Native advertising should contain a clear and prominent disclosure such as “ad,” “advertisement,” and “paid advertisement” – but, terms such as “promoted” or “sponsored” are ambiguous. For videos, the disclosure should be made in the video itself before the consumer receives the advertising message.

Sheila Raftery Wiggins, of the Newark office, handles matters involving complex commercial disputes, insurance defense, coverage disputes, financial fraud, and attorney ethics.

© 2009- Duane Morris LLP. Duane Morris is a registered service mark of Duane Morris LLP.

The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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