FTC Giving Native Advertising a Closer Look

FTC LogoThe FTC has announced they will hold a workshop on the subject of native advertising on December 4. While the fact that holding a workshop isn’t necessarily that big of news, the fact of the FTC is looking into native advertising at all is big news.

What is native advertising? SEO professionals probably know native advertising best as advertorials, something that Matt Cutts, the head of Google’s spam-fighting team, has discussed recently because it violates Google’s webmaster guidelines, particularly when it isn’t clearly labeled as being advertising or an advertorials.

Here’s how the FTC describes its upcoming workshop:

The Federal Trade Commission 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, referred to as “native advertising” or “sponsored content.”

Increasingly, advertisements that more closely resemble the content in which they are embedded are replacing banner advertisements – graphical images that typically are rectangular in shape – on publishers’ websites and mobile applications. The workshop will bring together publishing and advertising industry representatives, consumer advocates, academics, and government regulators to explore changes in how paid messages are presented to consumers and consumers’ recognition and understanding of these messages.

Advertorials have been a pain point for many people. This content is often completely disguised as being legitimate and unbiased content and appears on a legitimate news site, when in actuality is being paid for by advertiser, as an ad.

However, it could also mean that the FTC is looking at things like a bloggers being paid to write a “sponsored post” which might only state in tiny letters at the very bottom of the page that anything reviewed on the blog could potentially be a paid advertisement.

If the FTC decides to include those types of things as native advertising, it could have a widespread reach through many bloggers who earn income doing these types of sponsored posts, and whether it would affect only new content or if it’s retroactive to everything previously published by a site.

The FTC has been closely looking at the matter of online advertising. Earlier this year, the FTC updated their established guidelines for search engines to follow to differentiate natural free listings from paid advertisements, paid placements, and paid inclusion type programs.

But it is surprising that the FTC is going to look specifically into native advertising, because while it is an annoying problem and one that Google itself is already addressing, it definitely isn’t widespread, unless perhaps you look at some very specific verticals, such as weight loss.

Because advertorials tend to be kind of spammy to begin with, there really aren’t any standard guidelines that advertisers tend to follow, unlike specific guidelines for banner ads or pay-per-click ads, other than the encouragement to include some sort of reference to it being sponsored.

What exactly is being considered with regards to native advertising and how users interact with them? The FTC has also released the topics the workshop may cover:

  • What is the origin and purpose of the wall between regular content and advertising, and what challenges do publishers face in maintaining that wall in digital media, including in the mobile environment?
  • In what ways are paid messages integrated into, or presented as, regular content and in what contexts does this integration occur? How does it differ when paid messages are displayed within mobile apps and on smart phones and other mobile devices?
  • What business models support and facilitate the monetization and display of native or integrated advertisements? What entities control how these advertisements are presented to consumers?
  • How can ads effectively be differentiated from regular content, such as through the use of labels and visual cues? How can methods used to differentiate content as advertising be retained when paid messages are aggregated (for example, in search results) or re-transmitted through social media?
  • What does research show about how consumers notice and understand paid messages that are integrated into, or presented as, news, entertainment, or regular content? What does research show about whether the ways that consumers seek out, receive, and view content online influences their capacity to notice and understand these messages as paid content?

All advertisers will want to keep a close eye on this to see how it could affect the entire industry, especially in regards to paid advertisements, paid placement, and advertorials.

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