IAB Sorts Out Native Ahead of FTC Workshop

Suggests one-size-fits-all guidelines won't work

Timed to coincide with the Federal Trade Commission's workshop this week on native advertising, the Interactive Advertising Bureau plans to release a prospectus on the industry's hottest ad format. The report is the digital community's first pass at defining best practices for a $3 billion format that has caught the attention of regulators because of its potential to blur the lines between advertising and editorial.

Dubbed "Blurred Lines: Advertising or Content?" Wednesday's workshop has been billed by the FTC as a day of fact finding. Speakers include representatives from publishers including Hearst, The Huffington Post, Mashable and BuzzFeed, advertisers such as Procter & Gamble, and academicians, consumer groups and trade groups.

While the FTC isn't planning to issue any new additions to guidelines that already exist for endorsements, sponsorships, paid search and online ad guidelines (dot-com disclosures), it is expected to push the industry toward adopting practices to make sure consumers aren't confused and know an ad when they see one.

But first, the FTC needs to define native advertising, and determine whether consumers have been deceived by some native ads and what they think about them.

The native ad trend has sprung up so fast and in so many incarnations that the industry has barely had time to set detailed guidelines to protect it from the unfair and deceptive advertising authority of the FTC.

"The FTC has no expectation of putting out guidance, but to the extent the workshop helps us bring the industry to focus on the issue it will be helpful," said Peter Minnium, head of brand initiatives for the IAB and its native ad task force, which is working on guidelines.

"[This prospectus] is a helpful framework that will help the industry have meaningful conversations, not the type we're having now," Minnium said.

While some in the industry—among them, Sharethrough, a native ad network—advocate a single standard, Minnium and his task force advocate that disclosures should vary by format.

The IAB's report classifies native ads into six broad product types: In-feed, like Facebook or Yahoo; search; promoted listings (Yelp, Amazon); recommended content (Outbrain, Tabula); custom (Hearst, BuzzFeed); and native ads inserted into standard ad positions.

The IAB's report will also include general principles for setting guidelines for each format with the overarching principle that a reasonable consumer should be able to distinguish native ads from editorial product.

"We'll have to work out best practices within each format," said Minnium. "Universal disclosure across formats is difficult because brands are different, the ads are different and the consumer experience is different."

The industry already has some clues as to what the FTC will be looking for in terms of acceptable industry guidelines. Based on warning letters the agency sent to search engines for paid results, clear and conspicuous labeling that consumers would understand may include visual clues (background shading or prominent borders) and noticeable text labels. Similarly, The American Society of Magazine Editors, which issued broad guidelines in October, recommended clear labeling, a "What's This?" rollover message at the top of each native ad, and visual separation from edit by way of different fonts and graphics.

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