Native ads are said to be more attractive to marketers and publishers because they are more effective at engaging consumers. With the ubiquity of traditional banner ads that are often intrusive and annoying, ads that blend in with regular content have emerged as a lucrative alternative. But the format has regulators worried that consumers will be unable to distinguish between true, editorial content and marketing aimed at convincing them to buy things.
Native ads that are deemed "misleading" will now risk running afoul of the FTC, which is specifically charged with policing deceptive business practices. But drawing the line between benign native ads and unacceptable attempts at persuasion has proven incredibly complicated — as the FTC's guidelines show.
Suppose you saw an image of a sports car on this website followed by a headline that looked exactly like all the others, except that it read "Come and Drive [X] Today." That specific example would be fine, according to the FTC's guidelines, because it would be "inherently obvious to consumers" that it was an advertisement.
But other examples might not get such latitude. The FTC's guidelines go on to consider how businesses can appropriately signal, or disclose, to consumers the fact that what they're looking at is an advertisement.
"Depending on the circumstances, a disclosure in the text [of an article] may not remedy a misleading impression created by the headline," the agency writes, "because reasonable consumers might glance only at the headline" and not click through to the article containing the disclosure.
In other words, a headline that doesn't tell the reader "I'm an advertisement" in some unambiguous way could be problematic.
Ultimately, the whole point of the exercise is to get marketers and publishers to be clearer. It seems obvious that ads shouldn't be misleading. And we shouldn't need a federal agency to tell us so. Yet the trend toward publishing ever more ambiguous advertisements — backed by increasingly detailed data on our personal browsing habits — points to a future that's in direct tension with the FTC's guidelines.
"What’s needed is a 21st-century set of safeguards that enable consumers to control the data used to deliver them ads, especially [for] formats like native that are specially designed to be disguised as content," said Jeff Chester, the executive director of the Washington-based Center for Digital Democracy.