FTC strikes in US native advertising case

The growth in native advertising and content marketing has drawn the attention of both government and independent regulators. In the UK this has tended to be the Advertising Standards Authority (ASA), while in the US it’s the Federal Trade Commission (FTC).

Earlier this year the ASA censured BuzzFeed over an advertorial for Dylon, a clothes-dye brand. Now it is the turn of the FTC.

US retailer Lord & Taylor was forced to settle after the FTC charged it with deceiving consumers over native ads. The offending material, which promoted its Design Lab clothing brand, was published in online fashion title Nylon.

The Nylon content included an apparently objective article, which had been edited by Lord & Taylor, and pictures on the magazine’s Instagram account. According to the FTC, there was no indication that these were paid-for promotions.

The FTC also found that the retailer had paid 50 Instagram ‘influencers’ to model the clothes.

FTC native advertising: what’s the view?

A quick look at the decision and two things come to mind. Firstly, what are these people (Lord & Taylor/Dylon) thinking of? Research has shown that people are at ease with branded content. Trying to hide it is like cheating at sport. Once you get found out the results are devalued.

The second thing is the impact on social media. So, say someone has 40,000 Instagram followers and is paid to wear some clothes. Do they have to add a disclaimer? Magazines and the likes of BuzzFeed are one thing, selfie-taking hipsters is something else.

FTC strikes in US native advertising case is part of Content24, the online magazine for London content marketing agency FirstWord.