Lately, the Federal Trade Commission has been acting all kinds of feisty.
First it busted two app developers for using “persistent identifiers” to collect kids’ information for targeted advertising. The FTC has also fielded two complaint about the YouTube Kids app, which runs junk-food videos like this but claims they’re not ads.
Now the FTC has issued new rules for the persistent purveyors of native ads, which the agency finally realized have hit epidemic proportions. As the New York Times reports, “the tactic now called native advertising is not new — many radio ads, magazine inserts and infomercials, for example, have long used a similar strategy. But native ads have grown more sophisticated online, and the line between marketing and journalism has blurred.”
To the point where we could use an FTC Deputy Commissioner of Optometry.
And maybe we’re sort of getting one. From Kristi Ellis at WWD:
FTC Issues ‘Native Advertising’ Rules and Potential Penalties
WASHINGTON — The Federal Trade Commission has officially weighed in on controversial online native advertising for the first time, setting new standards and business guidelines that if not met, could lead to millions of dollars in civil fines, as the line between editorial and advertisinghas become increasingly blurred in the digital age . . .
According to data from Business Insider Intelligence Unit, spending on native ads reached $7.9 billion this year, and it will mushroom to $21 billion in 2018. That’s up from just $4.7 billion five years ago.
For that reason, the FTC has issued Native Advertising: A Guide for Businesses, which says this in its prologue:
The FTC has issued an Enforcement Policy Statement on Deceptively Formatted Advertisements that explains how the agency applies established truth-in-advertising standards in this context. This Guide for Businesses supplements the Enforcement Policy Statement by offering informal guidance from FTC staff to help companies apply the Policy Statement in day-to-day contexts in digital media.
Part of that guidance deals with how native ads are executed and labeled, the Times reports.
The agency states, for instance, that advertisers “should not use terms such as ‘Promoted’ or ‘Promoted Stories,’ which in this context are at best ambiguous and potentially could mislead consumers that advertising content is endorsed by a publisher site.” The F.T.C. also provides guidance on where disclosures should appear. If a native ad appears as a user scrolls down a web page, for example, a disclosure should not appear below the ad.
In other words, you have the right to know when you’re being advertised to.
And “if a company is found in violation of an enforcement order,” the WWD piece says, “the potential is there for the FTC to levy multimillion-dollar fines.”
Of course, the $21 billion question is, how often will the FTC actually do that?
John Carroll, who also writes at Campaign Outsider and It's Good to Live in a Two-Daily Town, is a media analyst and mass communication professor at Boston University.
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