Too Hot to Handle?: Native Advertising and the Firestone Dilemma

By Eliezer Joseph Silberberg. Full Text.

Native advertisements are advertisements that mimic the format and content of unpaid-for content that surrounds them. Instead of interrupting the content being consumed, native advertisements become part of that content, and because of this unique format, consumers often want to engage with native advertisements. This reformulation of advertising has radically remade the process of persuading consumers to act, believe, and consume. And, over the past two decades, native advertising has become both a ubiquitous part of everyday content consumption and an ever-growing, billion-dollar industry.

Unfortunately for consumers, native advertising is also very deceptive. Most people cannot differentiate native advertising from non-native advertising content. To make matters worse, most native advertising does not include a disclosure that it is advertising—and even when a disclosure is present, absent particular disclosure language, many consumers still fail to recognize the content as advertising. To paraphrase contemporary native advertising scholars, we live in a world where consumers cannot tell an advertisement and a non-advertisement apart.

To control native advertising deception, the Federal Trade Commission has, among other things, promulgated numerous subregulatory guidance documents, initiated enforcement actions, and engaged with regulated parties through educational events. The FTC’s goal has been to ensure that native advertising is transparent to consumers and that consumer deception from native advertising falls below 15% consumer deception—the threshold established in Firestone Tire & Rubber Co. v. Federal Trade Commission. The outcome of these concerted efforts is an array of unclear, even contradictory guidelines that have worked against achieving the FTC’s goals.

This Note proposes that the FTC adopt an easily met unified disclosure framework for native advertising disclosure. That framework would require that each native advertisement have a disclosure with three elements: (1) the disclosure must include the language “Paid Advertisement” or “Paid Ad”; (2) the disclosure must include the name (and also logo, if available) of the party paying for the advertisement; (3) the first and second elements must be in close proximity to each other and to the advertisement itself. This Note argues the FTC should adopt this framework because it is empirically likely to reduce native advertising deception below the Firestone threshold. Furthermore, this framework will also produce simple, clear guidelines that balance the FTC’s consumer protection interests with the commercial interests of regulated parties.