The FTC applied old deception law to a new ad format in 2015

The revenue mechanism

Native advertising monetizes attention that is not visibly interrupted, but the closer a paid placement resembles editorial content, the more a reader's normal cues for "this is an ad" can fail. On 22 December 2015 the US Federal Trade Commission addressed that risk from the regulator's side rather than the industry's, issuing an Enforcement Policy Statement on Deceptively Formatted Advertisements alongside a companion business guide. The policy statement does not create a new format-specific rule; it applies Section 5 of the FTC Act, the Commission's long-standing bar on unfair or deceptive practices, to advertising "integrated into and presented as non-commercial content," stating the Commission judges deception by an ad's "net impression" on a reasonable consumer.

What the documents show

The Native Advertising: A Guide for Businesses, dated December 2015, gives concrete examples the policy statement does not: disclosures should use "clear and unambiguous language," sit "as close as possible to the native ads to which they relate," and appear "in front of or above the headline" because consumers read left to right and top to bottom. It names "Ad," "Advertisement," "Paid Advertisement" and "Sponsored Advertising Content" as terms likely to be understood, and states plainly that advertisers "should not use terms such as 'Promoted' or 'Promoted Stories,' which in this context are at best ambiguous." The policy statement adds that "only disclosures that consumers notice, process, and understand" satisfy the standard, and that a publisher's changed business model — including reliance on ad revenue as consumers block or skip ads — does not change the underlying deception analysis.

The assumptions exposed

The guide's list of acceptable and ambiguous terms is illustrative, drawn from formats current in 2015; it does not itself pre-approve every disclosure format later invented, and this entry does not extend its examples to formats the guide never addressed. The guide is business guidance, not a rule with the force of a regulation, though the underlying Section 5 deception standard it applies is binding law.

What to check before you rely on it

This is an editorial checklist. A publisher selling or running native or sponsored placements should treat the guide's placement and wording examples as the FTC's own account of what has satisfied a reasonable-consumer test, not as an exhaustive list that immunizes any label placed somewhere on the page.

• Does your disclosure sit before or above the content a reader engages with first, rather than below or beside it?
• Are you using a term the guide calls likely to be understood, rather than one it specifically flags as ambiguous?
• Is your disclosure language consistent across your site, which the guide treats as reducing the chance a reader is misled?

The guide describes what has satisfied the FTC's deception standard for specific, named examples; it is not a checklist that certifies compliance on its own.