Caveat Vendor

FTC No Fan of “Blurred Lines” When It Comes To Sponsored Ads

September 18, 2013

By Paul Hastings Professional

The FTC announced earlier this week that it will host a free workshop on December 4, 2013, to examine the increasingly common practice of blending digital ads with other content such as news and entertainment.  The Commission seeks to ensure that this practice – known as “native advertising” or “sponsored content” – does not confuse or mislead consumers.

The FTC has called for input from the publishing and advertising industries, consumer advocates, academics and government regulators.  The FTC also has invited the public to submit topics and research for the workshop.  The issues currently on the docket for the December discussion include:

  • The origin and purpose of the wall between regular and advertising content and the challenges publishers face in maintaining that separation in mobile and other digital media;

  • The methods and contexts in which paid messages are integrated into, or presented as, regular content, including when displayed on mobile devices;

  • The business models supporting the monetization and display of native or integrated advertisements and who controls how paid advertisements are presented to consumers;

  • Analysis of how ads can effectively be differentiated from regular content, such as through the use of labels and visual cues; and

  • Research on how consumers notice and understand paid messages that are integrated into, or presented as part of, news, entertainment or regular content.

This increased regulatory attention to sponsored content is not surprising given the FTC’s longstanding use of its Section 5 authority to prohibit unfair or deceptive advertising and its recently increased pace of enforcement and investigative activity.  In June 2013, for example, the Commission sent a letter to 24 search engines urging them to make the distinction between paid search results and advertising clearer.  Similarly, the FTC released its revised Dot Com Disclosures in March of this year to provide guidance to mobile and other online advertisers on how to make disclosures clear and conspicuous to avoid deception.
Stay tuned for updates as the FTC takes additional steps towards the potential promulgation of new online advertising guidelines addressing the increasingly blurred lines between paid and other content.

Caveat Vendor is Paul Hastings’ Consumer Issues blog. We welcome your feedback. Please contact our blog editor with any thoughts or suggestions.

Get In Touch With Us

Contact Us