Wednesday, June 20, 2018
Business

Regulators have a warning for ads that masquerade as real content

WASHINGTON — The Federal Trade Commission has rolled out new guidelines for websites that want to publish "native ads" — advertisements designed to look like "real" content on the page you're visiting.

That tactic has become a mainstay of sites such as BuzzFeed, which largely eschews traditional banners for ads that merely blend in with the publication's various listicles, polls and other content. The Atlantic, the Huffington Post and the New York Times have experimented with native advertising. So has the Washington Post, under a program called BrandConnect.

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 editorial content and marketing aimed at persuading them to buy things.

Native ads that are deemed "misleading" will 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 proved incredibly complicated — as the FTC's guidelines show.

Suppose you saw an image of a sports car on a news website followed by a headline that looked exactly like all the others, except that it said, "Come and Drive (name of car) 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 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 wrote, "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 an unambiguous way could be problematic.

Ultimately, the FTC's intention is to get marketers and publishers to be clearer. Yet the trend toward publishing more ambiguous advertisements — backed by increasingly detailed data on consumers' personal browsing habits — suggests how contentious the FTC's guidelines could be in practice.

"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, executive director of the Washington-based Center for Digital Democracy.

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