FTC to Address 'Blurred Lines' of Native Advertising in December 4 Workshop

Publishers and advertisers have been purposefully deceiving consumers for decades with ads meant to look, act and feel like editorial. The practice has blossomed online of late in the form of native advertising, but now the Federal Trade Commission is poised to step in with new regulations.

Tomorrow the FTC will host a workshop entitled “Blurred Lines: Advertising or Content?” to explore how much overlap exists between editorial and advertising online, and just how deceptive these ads can be in the various forms they get presented to users online.

Under current guidelines, publishers are in the clear so long as they sufficiently identify native ads as such. But that distinction is very much in the eye of the beholder – one man’s native ad is another man’s news article. Advertorials, after all, are nothing new; it’s just that the ability to deceive and confuse consumers online is much greater.

The FTC has invited online publishers, advertisers, consumer advocates, academics and lawyers to better understand how sponsored content is presented to consumers online and in mobile apps. The workshop will also attempt to gauge how well consumers recognize and understand native ads, the contexts in which they should be identified as advertising, and the most effective ways of differentiating native advertising from editorial content.

While it’s unclear how much momentum there is at the FTC to issue new rules, the potential implications for online advertisers and publishers could be profound. Native advertising has spawned a mini-industry in and of itself, with new firms, specialists and exchanges all vying for a piece of the action.

Yahoo began embedding stream ads, its native ad format of choice, into its news feed in May. Less than four months later, it revealed a company-wide redesign that made way for more stream ads that could be further integrated across Yahoo’s network on desktop, tablet and mobile devices.

Advertisers and publishers will likely join forces tomorrow to make the case for self-regulation, but the FTC rarely steps in to the fray to simply explore issues and bring vested parties together for a Kumbaya. Regulators beget regulations, and if that comes to pass in the case of native ads it will impact almost every facet of the online media industry, particularly the bottom line for online publishers and advertisers.

The FTC will host a live webcast of tomorrow’s workshop beginning at 10 a.m. EST, with registration open one hour prior. A link to the live webcast will be provided from this page just before it begins.