Skip to main content

FTC questions whether online 'sponsored' content is deceptive advertising

FTC questions whether online 'sponsored' content is deceptive advertising

Share this story

The FTC's advertising rules strictly prohibit deceptive advertisements: ads that readers or viewers probably won't recognize as ads. Online, though, those distinctions can become unclear. Even if something is labeled "native advertising" or "sponsored content," its placement or writing style can lead people to believe it's part of the rest of the site. In a daylong workshop yesterday, the agency questioned where to draw the line, and as The New York Times reports, there isn't necessarily a clear answer.

"The market has overwhelmingly blurred the lines in a way consumers have accepted."

Participants in the workshop (called, naturally, "Blurred Lines") touched on the practices of several sites known for their sponsored content or native advertising, including Mashable, The Huffington Post, and BuzzFeed. On the Media co-host Bob Garfield took a hard line against most sponsored ads and raised one of the most controversial examples: an Atlantic post that appeared to be a glowing news piece on Scientology but was in fact written and sponsored by the church itself. Like the advertorials of print media, it's not necessarily obvious that a piece is sponsored, nor whether it's an independently written piece or one guided by the needs of advertisers. "By presenting ads that resemble editorial content, an advertiser risks implying, deceptively, that the information comes from a nonbiased source," said FTC chair Edith Ramirez.

The FTC has previously taken on Twitter ads, telling companies that they needed to include clarifications like "Ad" in celebrity endorsements and refrain from giving any misleading information, even if it was included in a followup tweet. Here, the agency doesn't seem to have settled on an answer. FTC tests have affirmed the common wisdom that advertisers would rather use the term "sponsored" than directly label an ad, but the question remains whether the word confuses readers.— and whether it does so in a way that gives advertisers an unfair boost.

Professor David Franklyn of the University of San Francisco School of Law said that early research showed many consumers couldn't identify clearly marked advertisements, and half didn't even know what "sponsored" meant. "The market has overwhelmingly blurred the lines in a way consumers have accepted because search is free and the internet is largely free," he said, as quoted in AdWeek. "It's going to be very hard to regulate."