The Federal Trade Commission (“FTC”) will host a one-day workshop on Wednesday, December 4, 2013 to look at the issue of “sponsored content” or “native advertising,” terms which refer to advertising that is blended into news, entertainment, and other content. According to the FTC, the workshop will “bring together publishing and advertising industry representatives, consumer advocates, academics, and self-regulatory organizations to explore: the ways in which sponsored content is presented to consumers online and in mobile apps; consumers’ recognition and understanding of it; the contexts in which it should be identifiable as advertising; and effective ways of differentiating it from editorial content.”
According to eMarketer, spending on sponsored content is expected to grow 24% to $1.9 billion this year, a faster growth rate than for most other forms of digital marketing. New publishers, such as Buzzfeed, generate their ad revenue around sponsored content, and more traditional publishers, like Forbes and the Washington Post, are following suit.
The blending of advertising and content, though, has been met with regulatory scrutiny. For example, search engines have drawn the attention of the FTC for the practice. The National Advertising Division also examined Qualcomm’s sponsored content campaign. As companies look for new and better ways to reach consumers through their ads, they should proceed with caution and ensure that they’re providing the necessary disclosures. Clearly, the FTC is paying attention.