Native Advertising Law: The Consequences of Small Print “Sponsored”

native advertising law picture: words on blackboard with doodles

Media chatter suggests the Federal Trade Commission is turning its gaze towards “native ads” – a.k.a., sponsored content. At an industry conference, Mary Engle, an FTC director, explained the agency’s core apprehension regarding native advertising. She explained:

“For us [the FTC], the concern is whether consumers recognize what they’re seeing is advertising or not.”

Is It Enough To Just Use A “Sponsored” Label?

A lot of websites demarcate promotional sections with a “Sponsored Stories” headline. Does that satisfy FTC guidelines?

Some marketers label native advertising in fine print. Think: sponsored (don’t worry, you’re not the only one who can’t read it). At the event, FTC’s Engle reminded attendees that the commission had won cases, against brands and marketers, in which the word “advertorial” was so small the average person didn’t notice it.

If It Misleads, Your Business May Bleed

A journalism axiom instructs: “If it bleeds, it leads!” Meaning: gory stories get front-page coverage because no matter how civilized, our ancient gladiator genes still crave grisly and gruesome. Call it “rubbernecking syndrome.”

As a variation on the theme, native advertisers should remember: “If it misleads, a business may bleed!”

If native advertising materials mislead “a significant percentage of consumers,” then the FTC can take fiduciary action against advertisers, designers, third-party promoters — and sometimes even payment processors.

Native Advertising and Marketing Audits Can Be a Business’ Best Friend

U.S. brands courting customers in other countries need to follow domestic and foreign advertising laws.

Are you positive you understand – and follow – every state, federal, and international marking law, regulation and guideline? Ask yourself the following questions:

  • Do you know how European and UK privacy laws affect digital marketing campaigns?
  • How about California’s strict digital privacy statute?
  • Do you allow people in the UK to purchase your product? If yes, are you sure you’re up-to-date on the latest European Union disclosure requirements?
  • Do you fully understand the Children’s Online Privacy Protection Act and how it affects your marketing efforts?
  • What about Section 5 of the FTC Act and the Dot Com Disclosures?

A marketing legal review may cost a couple of hundred dollars; a censure from the Federal Trade Commission could set you back millions.

Contact Kelly Warner’s online marketing lawyers and e-commerce attorneys to schedule a native advertising audit or full online marketing review, to ensure compliance.