FTC: Publishers Will Be Held Responsible For Misleading Native Ads

Mary EnglePublishers taking the role of an ad agency by creating content for marketers should make sure they’re not creating misleading native advertising: The Federal Trade Commission will hold publishers responsible.

“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, told attendees at the Clean Ads I/O conference in New York City on Wednesday.

Traditionally, the FTC has not held publishers responsible for misleading ads on their properties, be they TV networks, radio stations, websites or apps. They were just a distribution channel.

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

She highlighted examples of native advertising on BuzzFeed, Wired and Gawker.

Engle indicated that the FTC will focus less on the content of native advertising, and more on how such advertising is displayed and labeled on the site.

“I would urge advertisers to think about how to communicate [disclosure] to consumers while wanting the ad to be in the flow of what consumers are seeing,” she said.

Just having a “sponsored” label won’t be enough. The FTC has won cases where “advertorial” was presented in such a tiny font as to be misleading. According to the FTC, reasonable consumers may only look at the headline and not the fine print.

“An ad is deceptive if it misleads a significant percentage of consumers,” Engle said. Questioned, she clarified that usually means 15% of consumers, and sometimes as few as 10% of consumers. The FTC uses tests which ask consumers questions about an ad to measure how misleading an ad is.

While FTC is not a “gotcha” organization, IAB EVP and general counsel Mike Zaneis said, it will likely crack down on native advertising disclosures.

“‘You may also like this’ when ‘this’ is an ad is probably deceptive,” Zaneis said. He said that type of language is something the FTC is not likely to overlook.

The FTC is not anti-native advertising.

“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.”

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  1. jhoch

    So product placement doesn’t need to disclose the fact that it is advertising, but publishers need to disclose it in big letters? I don’t disagree with the ruling, but let’s be consistent FTC.

  2. I wonder if they are going to publish a list of “best practices” for webmasters to follow.

  3. We have filed at FTC report on role that RTB and data targeting playing with Native Ads. Both the privacy issues and also the impact of micro-targeting on user understanding of native will be part of the FTC deliberation.

  4. G.M.Schall

    Having a soda logo or computer laptop with an easily identifiable logo as product placement in a movie or video is a lot different from native ads. The product is there for you to see, but the actors are not describing the properties of that product to get you to buy it. I HAVE, however, seen print advertising that buries the fact that it is an advertorial, trying to convince me it is an actual news item reporting on that product. If a website wants to post a company logo in a newsfeed, fine. That is product placement. If they write an article about how great the product is and don’t disclose that they got paid to do that, that is deception, and the FTC should go after them.

  5. Really hope more regulation will come to the programmatic native side too. For buying platforms it is often challenging to ensure in-feed ads are clearly marked. After all, brands want to make sure that every click was intended, rather than accidental. There is simply no better way to angry the reader by tricking him into clicking an ad. Prominent disclosure of in-feed native ads is essential. Here is a good overview of what new FTC regulations regarding native ads mean for brands: http://www.business2community.com/native-advertising/ftcs-new-native-advertising-guidance-mean-brands-01420238