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FTC May Take Aim At Native Advertising

December 4, 2013

Too many advertisers imply info comes from an unbiased source.

Native advertising tactics have Federal Trade Commission officials restless. Advertising that portrays itself as independent, unbiased reporting is drawing increased scrutiny from the FTC, which warned of a more vigilant campaign against the age-old practice, which has found new followers on the internet.

Digital advertising, which has the ability to target specific audiences and individuals, has led to a boom in the popularity of what is known online as native advertising, paid links or sponsored content. Those features have previously gone by such names as advertorials or infomercials. But that growth has led to concern among consumer protection officials, at the FTC and elsewhere, that the commerce-driven content can mislead consumers, at times even when the information is labeled advertising.

“The delivery of relevant messages and cultivating user engagement are important goals, of course,” Edith Ramirez, the chairwoman of the FTC, said at a conference entitled Blurred Lines: Advertising or Content? – An FTC Workshop on Native Advertising.

“That is the point of advertising, after all,” Ms. Ramirez added, to an audience of several hundred advertisers, academics and media executives. “But it’s equally important that advertising not mislead consumers. By presenting ads that resemble editorial content, an advertiser risks implying, deceptively, that the information comes from a nonbiased source.”

FTC officials said that recent surveys on online publishers revealed that 73% offered native advertising opportunities on their sites, and that an additional 17% were considering offering them this year. About 41% of brands and one-third of advertising agencies use native, they said.

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