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Is compulsory regulation looming over native advertising?

Online adver­tis­ing agen­cies are fac­ing a poten­tial­ly big headache in the U.S., as con­tro­ver­sy about native adver­tis­ing begins to heat up. Dili­gent art direc­tors and account man­agers might want to take note that the FTC is threat­en­ing for­mal reg­u­la­tion unless the adver­tis­ing indus­try gets a good deal clear­er about the dis­tinc­tions between native ads and non-pro­mo­tion­al con­tent online.

Native con­fu­sion

The issue that’s foment­ing the new threat of enforced reg­u­la­tion is essen­tial­ly to do with native advertising’s poten­tial to con­fuse: it’s known to be more effec­tive than ban­ner ads, but some­times the line between edi­to­r­i­al and adver­tis­ing con­tent seems decid­ed­ly blur­ry.  That’s what’s got the FTC’s sap rising.

Most art direc­tors and account man­agers will be aware that the FTC has for long been on guard against ads that look too much like edi­to­r­i­al con­tent – it began sig­nal­ing its dis­ap­proval as long ago as 1967. And it’s been keep­ing abreast of dig­i­tal devel­op­ments, hav­ing recent­ly warned search engine leviathans like Bing and Google to start using far clear­er visu­al cues to dis­tin­guish between reg­u­lar search results and paid search and ads.

The FTC’s Direc­tor of Adver­tis­ing Prac­tices, Mary Engle, told Adweek magazine:

“Regard­less of con­text, con­sumers should be able to tell what’s an adver­tis­ing pitch, whether it’s an adver­to­r­i­al, an infomer­cial, word-of-mouth mar­ket­ing or native advertising.”

Hard­work­ing account man­agers and their cre­ative art direc­tor col­leagues in Adland shouldn’t view these words as emp­ty sug­ges­tions. Adver­tis­ing law expert Lin­da Gold­stein says:

“Cer­tain­ly, the search engine guid­ance should serve as an ear­ly warn­ing to the indus­try that at some point in the future, unless the indus­try self-reg­u­lates, the FTC may be knock­ing on their door.”

New guide­lines beckon

The Adver­tis­ing Self-reg­u­la­to­ry Coun­cil, which was set up to pro­vide guide­lines for adver­tis­ers to stop them inad­ver­tent­ly butting heads with reg­u­la­tors, agrees that new mea­sures need to be devel­oped. Its CEO, Lee Peel­er, said:

“Con­ven­tions need to be devel­oped, like they have for news­pa­pers and infomer­cials on TV.”

And he’s no soli­tary voice. The IAB is start­ing to think in terms of guide­lines and launched a native ad task force last month. As its Head of Brand Ini­tia­tives, Peter Min­ni­um, puts it:

“There’s a huge amount of con­fu­sion in the mar­ket. There is an urgency for guide­lines, but we have to get it right from the start.”

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