What the FTC’s New Native Ad Policy Means For Influencer Marketing

Late last month, the Federal Trade Commission released updated guidance on disclosures regarding native ads and clarity on how it will police what it views as content designed to deceive consumers.

This updated policy statement is more detailed than in the past and such guidelines are clearly needed since publisher disclosure of native ads is far from consistent. Furthermore, a recent study published in the Journal of Advertising shows that consumers have difficulty distinguishing between native advertising and non-sponsored editorial content.

The new enforcement policy and the business guidelines are a result of two years of study by the agency and include extensive examples of various types of sponsored and influencer marketing content. Alongside each example is the FTC’s recommendation of whether or not a disclosure is necessary, largely based on formatting that is similar to non-sponsored content on the same site and the level of endorsement communicated in the content. The guidelines also explicitly state how disclosures should be displayed to maximize the chance of a viewer understanding that the content contains an ad.

Digital marketing observers are split on the effect of the new guidelines. Siobhan O’Neill, vice president of social strategy at Ayzenberg, believes brands will appreciate the detailed information. “The FTC’s business guidance is merely a clarification of language. Marketers, creators and advertisers should welcome these documents because they remove ambiguity from the process.”

Content Marketing experts Joe Pulizzi and Robert Rose both expressed concern about the definition of the rules and how they work for digital content. On episode 111 of their This Old Marketing podcast, they liked the idea of standards but worried about how broadly the FTC is requiring disclosure and felt some aspects still seem fuzzy. While the guidelines state that any path to a piece of content needs to include a disclosure before the consumer sees it, Pulizzi said controlling every link (for example, if a consumer opts to share an article or finds it in search) seems unenforceable. They also noted that while the new documents focus on publishers, the definition of a publisher will be tough to distinguish. “You don’t need credentials to be a publisher so how do they differentiate from a corporate blog versus an actual publisher,” asked Pulizzi.

The Interactive Advertising Bureau said in a statement that it lauded the FTC for spelling out detailed recommendations on native advertising but it still needs to study the guidelines more. “(The) IAB has been telling our members for years that ‘disclosure is not optional’ for native advertising,” said Brad Weltman, vice president of public policy at the IAB, in the statement. “At the same time, we want to evaluate more carefully the FTC’s specific recommendations, to assure they are technically feasible, creatively relevant, and do not stifle innovation.”

O’Neill says those that are playing by the rules should be fine, but she also advises sensible caution. “While the IAB worries that this will stifle innovation, I think the clarity helps us think more creatively. That said, marketers and creators working in hot influencer marketing formats – consumer/product reviews, expert opinions, news/features, research reporting or investigative reporting – should definitely reevaluate their creative before the FTC does.”

While plenty of marketers are talking a lot about the new rules, legal experts are, too. The law firm of Winston & Strawn has already posted a brief video with their take on the new policy.

Most publishers and marketing industry organizations are still reviewing the FTC’s documents but what seems clear is that we’ll only truly learn how these standards will work when test cases come up as the FTC starts to enforce them this year.