Are B2B marketers in compliance with FTC native advertising guidelines?

With native advertising expected to continue to grow its reach and impact as a B2B marketing strategy, and with the increasing move for many companies to adopt sponsored content as a marketing tactic, B2B marketers may need a refresher course on their Federal Trade Commission (FTC) guidelines.

National retailer Lord & Taylor's settled FTC charges that it deceived consumers by paying for native advertisements without disclosing that the posts were paid promotions for the company, illustrating the importance of assessing your companies knowledge and understanding of native advertising: a guide for business.

According to the FTC, the basic truth-in-advertising principle applies to ads or content that deceptively mimic the format of news programming or otherwise misrepresent their source. While the particular forms native advertising takes in the B2B digital sphere may be slightly different than consumer ads, the same truth-in-advertising principles apply. The more a native ad is similar in format and topic to content on the publisher's side, the more likely that a disclosure will be necessary to prevent deception.

If the FTC decided to audit publishers' native ads today, around 70 per cent of websites wouldn't be complaint with the current business guidelines. In fact, a report which examined how aware B2B marketers were of the FTC guidelines - which expects full disclosure of sponsored-content compensation - revealed that only 8 per cent of sponsored-content creators in B2B marketing were aware of and understood the FTC guidelines for sponsored content. In fact, one-third of B2B marketers said they were not aware of the guidelines. Further, according to the Content Marketing Institute (CMI) and Marketing Profs, while more than half (51 per cent) of B2B marketers in North America expect to increase their content marketing spending over the next 12 months, they must ensure that the sponsored content is in line with FTC guidelines.

According to the FTC's native advertising: a guide for businesses, "the watchword is transparency. An advertisement of promotional message shouldn't suggest or imply there is anything other than an ad." As a guide, the FTC suggests that you review your native ads from the perspective of the individual who doesn't have industry expertise.

For B2B marketers who plan on implementing content marketing and use sponsored social as well, know the facts. Lord & Taylor was charged with three separate violations and one that could easily apply to B2B marketing is their third violation - that the company falsely represented a written article as if it reflected an independent opinion when it was in fact a paid ad.

Additionally, the FTC's enforcement policy on deceptively formatted advertisements doesn't apply just to advertisers. In appropriate circumstances, the FTC has taken action against other parties who helped create deceptive advertising content including ad agencies and operators of affiliate advertising networks.

The guidelines state that everyone who participates directly or indirectly in creating or presenting native ads should make sure that ads don't mislead consumers about their commercial nature. Finally, marketers who use native advertising have a particular interest in ensuring that anyone participating in the promotion of their products is familiar with the basic truth-in-advertising principle.

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Laurie Fullerton

Laurie Fullerton is a writer based in Boston, MA with a background in business, sports, community, medical and travel writing. She has been a newspaper editor in the Boston-area, a sports writer covering yacht racing and a community reporter. She has been reporting for The Drum since October 2015.

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