Native Ad Regulation

Just a couple days before Christmas, the Federal Trade Commission issued guidance on Native Advertising that touched off a wave of blamestorming across the digital industry.

The timing was terrific.  With visions of sugarplums dancing in everyone’s heads, and the ad industry preparing for its end-of-the-year shutdown, the controversy could wait.  We would deal with it in the New Year – first week back.  We promise.

Oh, wait.  First week back is CES, when half the ad industry is in Vegas looking at overpriced virtual reality headsets and 4K televisions too big for anyone’s living room.

See why the story isn’t nearly as big as it should have been?

Still, coverage wasn’t exactly nonexistent.  Bob Garfield wrote an impassioned appeal to common sense.  Ari Rosenberg accused the IAB of being asleep at the wheel.  You might have missed it – Garfield’s column ran in the no man’s land period between Christmas and the New Year, and Rosenberg debuted his piece while ad execs flew back from three days’ worth of sensory overload and losing their holiday bonuses at the roulette tables.

But you’re not interested in the finger-pointing.  You want to know about the path forward, now that the Native Advertising sector, projected to represent billions of dollars in revenue, is now subject to potentially growth-limiting governmental regulation.

Regulated industries?  That happens to be one of my specialties.  This guidance from the FTC should strike familiar tones with those of us who work in regulated industries like pharma and finance day in and day out.  Marketers should take the following to heart:

Nobody Owes Native a Path Forward

There’s always a lot of confusion whenever the U.S. Government issues guidance on activities in the advertising sector.  A lot of that confusion stems from the notion that marketing people think the government owes the business a fruitful and viable path forward.  It doesn’t.

It is up to the people in the business to chart Native Advertising’s path forward, under the guidance issued by the FTC.  It’s not up to anyone else.  We’ve got to figure it out.

The FTC is allowed to ignore pleas that they’re killing the business, or to adopt more reasonable approaches to regulation, or to avoid adopting a layman’s perspective when judging what constitutes a violation and what doesn’t.  The FTC doesn’t owe Native Advertising a single thing.

From its perspective, the FTC is stepping in to curb a behavior, and all that matters is its own interpretation of what constitutes that behavior.  Nothing else.

Clarification Can Be a Challenge

If you think the government’s role in Native’s path forward is confusing, wait until you want to assess whether a specific tactic violates guidelines or not.  And then you find out that nobody owes you an answer.

No, your specific use case isn’t deserving of some sort of government task force to make a ruling on whether or not it constitutes a violation.  That’s where lawyers and consultants come in.  Their advice, coupled with your agency’s ability to interpret the guidelines, will guide Native Advertising efforts forward.  Here’s the rub – this isn’t 100 percent foolproof and anyone telling you otherwise is lying.

Risk Is Part of the Game

Poke your toe over the line at your own risk.  For example, the FTC has given clear examples of disclosure language that falls short – “promoted stories” is one example.  But suppose you want to use “Featured Advertorial” to label your ad?  Not only does no one at the FTC owe you an answer on that specific use case, but if it happens to see the ad running, it’s going to rely on its own interpretation of the guidance to figure out whether a brand violates that guidance.  You could get a slap on the wrist.  Then again, they could throw the book at you.  Or nothing could happen at all.

This won’t occur in a vacuum, but players should expect that some competitors are just not going to be tolerant of any risk in this regard.

Thus, dancing close to the line thus has a high risk/reward profile.  That’s going to be attractive to certain corporate cultures and absolutely repellant to others.  It’s a consideration when thinking about 2016 plans and beyond – how risk-tolerant is the category and what could happen if a competitor gets a head start on Native?

We can expect the bickering over regulation of Native Advertising to heat up in the coming weeks and months.  But if you’re looking for guidance, it makes sense to look to marketers who have been laboring under regulation for some time.  Even in the absence of concrete tactical advice, mere perspective can be valuable.