FTC Clamps Down on Website Sponsored Content


The Federal Trade Commission has just released an Enforcement Policy Statement regarding the use of “Deceptively Formatted” ads. In doing so, it may have beheaded the concept of sponsored content advertising with a single stroke.

The nineteenth season of South Park may have garnered most of its attention from its jabs at the new generation of political-correctness, but its “Does she know she’s an ad?” subplot about deceptive advertising practices and sponsored content was just as damning. The fictional citizens of the small Colorado town participated in Trey Parker and Matt Stone’s comprehensive evisceration of popular media, news, editorial integrity regarding advertising, and the ad companies themselves.

The FTC’s guidelines will potentially render content not clearly marked as advertising illegal. “More from the web” will have to become “Advertisements,” turning a sly opportunity to draw clicks to seemingly relevant links into something users will be able to quite easily ignore. Furthermore, the necessity of such obvious tags will make it a trivial matter for anyone to block them from appearing at all.

The FTC isn’t mincing words. There is very little room for interpretation in these new guidelines, which “will find an advertisement deceptive if the ad misleads reasonable consumers as to its nature or source.” The guidelines for what is considered deceptive are also very clear; an ad is deceptive “if they mislead consumers into believing they are independent, impartial, or not from the sponsoring advertiser itself.” So long, “You might also like…”

And just in case anyone thought that they might still find some wiggle room, the FTC offers an even more granular instruction on how the situations must be handled.

The more a native ad is similar in format and topic to content on the publisher’s site, the more likely that a disclosure will be necessary to prevent deception.

Furthermore, because consumers can navigate to the advertising without first going to the publisher site, a disclosure just on the publisher’s site may not be sufficient.

In that instance, disclosures are needed both on the publisher’s site and the click- or tap-into page on which the complete ad appears, unless the click-into page is obviously an ad.

While consumers will largely celebrate this as a victory, it does call into question the future of online advertisement itself. Without the ability to simply trick people into believing they can trust the disguised content they are reading couched in one of their favorite sites, ad agencies may again need to employ the likes of Don Draper to create content that is more compelling than sneaky.

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