FTC Sets Sights on Native Advertising, But Outcome Unclear

Government Agency Says Any Talk of Next Steps 'Premature'

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When the Federal Trade Commission convenes its first workshop on native advertising this December, the government agency will be looking to learn about best practices and figure out whether consumers clearly recognize sponsored content as advertising. Digital publishers, for their part, will seek to assure the commission that they have the situation under control.

As native advertising continues to gain visibility, a debate is raging around whether publishers are making it clear to readers that the content they're consuming is sponsored. Now, the governmental body tasked with promoting consumer protection is getting involved, and what happens from here is unclear.

The FTC announced Monday that it "will host a workshop on December 4, 2013 in Washington, DC to examine the practice of blending advertisements with news, entertainment, and other content in digital media."

The agency said the day-long session will bring together industry representatives, academics, consumer advocates and regulators to explore "changes in how paid messages are presented to consumers and consumers' recognition and understanding of these messages."

Laura Sullivan, an attorney with the FTC, told Ad Age that the workshop is being held primarily to better the agency's understanding of native advertising. According to Ms. Sullivan, the workshop is the first time the commission will officially touch on the issue. But, she added, the agency has examined similar areas such as infomercials, search engine marketing, and advertorials. In some instances, the FTC has brought lawsuits against bad actors in those areas.

However, the workshop is not an indication that actions by the FTC are imminent, Ms. Sullivan said. "We certainly will weigh the information and consider what the next steps will be," she said. "I think it's premature to say that there will be any next steps."

Digital publishers, of course, are trying to prevent the FTC from getting more deeply involved. The Online Publishers Association, for instance, released research in July that showed labeling native advertising clearly was a top priority for its members.

"In a recent survey of OPA members on native advertising, transparency and labeling surfaced as a critical best practice," said OPA President Pam Horan. "We encourage the industry at large to embrace this as it is not only important to maintaining a trusted relationship with the consumer but demonstrates to law makers and the administration that self-regulation works."

Implicit in Ms. Horan's statement: an assertion that the industry would rather self-regulate than have Washington step in.

The Interactive Advertising Bureau announced in June that it would establish a taskforce on native advertising to explore best practices and definitions. The organization said it will participate in the FTC's workshop if invited.

"The upcoming workshop will be a great opportunity to raise the awareness level of key Washington decision makers about this evolving format" said Mike Zaneis, senior vice president of public policy and general counsel at the IAB, in an email to Ad Age. "We look forward to working with the Commission to further educate industry on best practices."

Taskforces in the digital advertising industry have, at times, sat on critical issues without taking much action. For the FTC, this workshop may be a way of showing that it may not stand for inaction for long.

"We certainly are aware of the internal debate on the topic," said Ms. Sullivan.

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