Publishers Flout FTC Rules On Native Disclosures

February 28, 2017 in Native Advertising

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MediaPostThe Federal Trade Commission has issued a number of guidelines for native advertising, intended to maintain transparency by ensuring consumers know the ads are paid marketing and not editorial content.

These disclosures may decrease the effectiveness of native ads, leading many publishers to ignore the rules.

Well, that’s one possible interpretation of the findings of a new study by MediaRadar, which found that 37% of publishers weren’t complying with the FTC rules on disclosure in 2016. That’s a big improvement over the previous study, when 61% of publishers were non-compliant, but there’s no denying large numbers of consumers may still be being deceived — and you can’t help wonder if some of it’s on purpose.

Although eye-catching exposures may decrease the efficacy of native ads, publishers should consider the alternative.

MediaRadar points out that currently the FTC can levy a fine of $16,000 for each native ad violation. The regulator also seems to be putting some teeth into the rules, if recent cases are any indication.

Last year, the FTC reached a settlement with Lord & Taylor over a campaign that involved sponsored posts in Nylon and with Instagram fashion bloggers. In another case, the regulatory went after Warner Bros. over an influencer campaign for a videogame using big gaming bloggers including PewDiePie.

According to the FTC, the disclosures used text that was too small and were mixed in with other boilerplate statements, making it difficult, if not impossible, for consumers to actually read them. As part of the settlement, the FTC required that Warner Bros. implement an internal compliance system and make sure that influencer partners are also aware of the rules regarding disclosure.

Back in 2015, Kim Kardashian and drug maker Duchesnay ran afoul of the FTC and FDA for failing to disclose that the social media star was being paid to promote a morning sickness drug, Diclegis.

 

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