Ad law expert calls native advertising illegal

wolf in sheepskin


As Erik Sass notes at MediaPost,  so-called “native advertising” comprises

marketing messages…presented in a way that makes them hard to distinguish from editorial content, including their location on the page, choice of font, graphics and layout, all in an effort to get readers to give them the same consideration — and trust — they give to editorial content.

…In many cases, it is based on an attempt to deceive consumers into thinking they’re seeing something that is not a paid advertisement.

It’s one thing when a few ads look like editorial content, but there are now so many native ads, so cleverly disguised, that in a strange inversion it’s actually becoming hard to tell if a particular piece of editorial content isn’t advertising.

Like the paid Church of Scientology paid content campaign on The Atlantic’s website that was so virtually indistinguishable from genuine articles that it triggered a reader revolt, a withdrawal of the ads and a “We screwed up” apology from the publisher.

Or the Mashable post about “Why Godzilla was so mean” that includes a video claiming it was all just a case of hunger-pang irritability which a Snickers bar could have cured. So faithfully did it mimic editorial content, writes Sass, with “nothing that identifies it as an ad being presented by Mashable (e.g., a disclaimer, or a Snickers brand image somewhere near the headline) and also no indication that it isn’t an ad. I’m still not sure.”

There are almost as many definitions of native advertising as there are formats.

  • To online advertisers, it’s a cure for steadily eroding clickthrough rates.
  • To website publishers, it’s a multibillion-dollar and growing (71 percent the past year, BIA/Kelsey estimates) cash cow, supplying badly needed irrigation to the online publishing business model’s dried- up revenue stream. (Please pardon the mixed metaphor.)
  • To native advertising purveyors, it’s a series of euphemisms almost as misleading as the medium itself. Sharethrough, for example, claims “Native advertising is a form of paid media where the ad experience follows the natural form and function of the user experience in which it is placed. Native ads match the visual design of the experience they live within, and look and feel like natural content,” and “must behave consistently with the native user experience, and function just like natural content.” In other words, by being camouflaged to look like bona fide editorial content, they con you into reading them.

But now, an expert in advertising law calls them something else: Illegal.

In fact, they’ve been illegal since 1914, long before the internet was even a gleam in DARPA’s eye.

At MediaPost’s most recent social media insider summit, keynoter Vejay Lalla, a recognized advertising law authority, explained why. Article 5 of the century-old FTC Act explicitly brands advertising as illegally “deceptive if it omits material information, and that the omission is likely to mislead a consumer acting reasonably under the circumstances.” Such as the fact that it’s a paid ad, not an objective third-party report.

A newsletter from Davis & Gilbert, the law firm of which Lalla is a partner, went further, taking notice of “decades of law enforcement actions against [print and broadcast] publishers, including infomercial producers and operators of fake news websites that marketed products. In these actions, the FTC relied on Section 5 of the FTC Act, under which the omission of material facts with respect to an advertising claim is deceptive.”

FTC Commissioner Edith Ramirez agrees, sorta. At the commission’s December 4, 2013, probe of native advertising, she warned against ads that mislead consumers by “seamlessly and inconspicuously” mimicking real content. “By presenting ads that resemble editorial content, an advertiser risks implying, deceptively, that the information comes from a nonbiased source,” she said in her opening remarks.

The FTC clearly has legal authority to act, but until they get around to exercising that authority, hundreds of millions of misled consumers have just one tiny glimmer of hope:

[G]iven the history of previous online ad formats (pop-up ads, spam, display) it’s very possible native advertising’s efficacy will decline rapidly once its novelty wears off.


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