If a consumer is led to believe that an ‘ad’ is independent, impartial, or not from the sponsoring advertiser itself, the Commission will not allow it, arguing that the source of the information is important for a consumer to know. For instance, if a consumer sees what appears to be editorial content on a website, but that content is actually a paid advertisement, their perception of the credibility or weight of the ad’s content can be altered. Knowing the source of that material means that the consumer hasn’t been misled and that they’re able to evaluate the information fairly. The recent Policy Statement explains how the FTC will determine whether the content is an ad and whether or not it is clearly identified as such. The main objective of the recent statement is transparency in online advertising. As a general rule, the FTC’s policies have an overarching focus on protecting the consumer (also seen in the enforcement of the ‘Made in USA’ policy), so this isn’t a surprising move.

The Enforcement Policy Statement reviews advertising formats that can potentially be deceptive, and discusses cases where the Commission has found an ad to be deceptive. This includes news formats like newspapers, sales visits and calls, emails with falsified sender information, use of endorsements, and so forth.

The Statement then reviews the Commission’s specific policies and stand on what is deceptive: that deception occurs when there has been a misleading representation that is material. A misleading representation is material when it can impact consumer choices or conduct regarding the product being advertised, and can happen even when the ad’s actual content itself is truthful—if a consumer can’t tell the ad is an ad, that’s also considered a material and misleading representation. The FTC sees either situation as deceptive.

For added guidance, the FTC has a page on their website depicting seventeen different situations with advice on when companies should think about specifically declaring that the consumer is viewing an ad. They strongly suggest that advertisers need to consider the ad as a whole, not just specific statements or visual effects included within the ad.

The FTC provides a list of factors for businesses to consider when creating and posting their ads, including:

1. The ad’s overall appearance
2. The similarity between the ad’s written, spoken, or visual style or subject matter and the non-advertising content surrounding the ad
3. The degree to which the ad is distinguishable from other content on the site

In addition to regular ads, these considerations should be applied to any click-on or tap-into page ad, where the advertiser provides a snippet of the ad and entices the consumer to click on the ad, taking the consumer to a page where the full ad will appear.

The Legal Framework Behind Native Advertising Enforcement

The FTC’s authority to regulate deceptive native advertising is rooted in Section 5 of the FTC Act, 15 U.S.C. §45, which broadly prohibits “unfair or deceptive acts or practices in or affecting commerce.” The Commission has interpreted this provision expansively for decades, applying it to print advertising, telemarketing, and now digital content. The 2015 Policy Statement is not new law—it is an articulation of how existing law applies to a new category of advertising format.

Native advertising—paid content designed to match the look and feel of the editorial environment in which it appears—has existed in various forms for decades. Advertorials in newspapers and sponsored segments on television predate the internet. What has changed is scale and sophistication. Digital native advertising can be nearly indistinguishable from journalism, and publishers have strong financial incentives to blur the line.

What Makes Native Advertising Deceptive Under the FTC Standard

Under the FTC’s established deception standard, an advertisement is deceptive if it contains a material representation or omission that is likely to mislead consumers acting reasonably under the circumstances. Applied to native advertising, the question becomes whether a reasonable consumer would understand that a given piece of content is paid advertising rather than independent editorial content.

The FTC has identified several categories of native content that present elevated deception risk:

• In-feed ads: Paid posts inserted into news feeds or editorial content streams in a format identical to organic content.
• Paid search listings: Search results that appear visually similar to organic results but are purchased placements.
• Recommendation widgets: “Recommended for you” content modules that blend paid placements with genuinely recommended content.
• Promoted listings: Paid product placements in e-commerce environments styled like top-ranked organic results.
• Branded content: Long-form articles produced or funded by an advertiser but presented under the publisher’s brand.

Disclosure Requirements: What “Clear and Conspicuous” Actually Means

The FTC requires that disclosures in native advertising be “clear and conspicuous”—a standard that has been interpreted to require more than a small-font disclaimer buried below the fold. The Commission’s guidance on clear and conspicuous disclosures, updated in its 2013 .com Disclosures document, provides that a disclosure must be:

• Placed in close proximity to the claim it relates to, not separated by intervening content;
• In a font size and contrast that consumers can actually read;
• Visible without scrolling in the context where most users will encounter the content;
• Worded in plain language that consumers understand, not legal jargon.

The FTC has specifically indicated that labels like “Promoted,” “Sponsored,” or “Partner Content” may be insufficient if consumers do not understand those terms to mean “paid advertising.” Consumer perception surveys are sometimes relevant to enforcement proceedings on this question.

Enforcement Actions and Their Consequences

The FTC has pursued enforcement actions against publishers and advertisers for deceptive native advertising. In 2016, the Commission took action against Lord & Taylor for failing to disclose that it had paid fashion influencers and the online magazine Nylon to post seemingly editorial content promoting a clothing line. The settlements required compliance programs, training, and monitoring by both the brand and its agency.

For publishers, the risk is not limited to FTC enforcement. State consumer protection laws in California, New York, and other states create parallel liability for deceptive advertising, and private class action litigation based on deceptive advertising has become increasingly common. Publishers that enter into native advertising arrangements should ensure their agreements clearly allocate responsibility for compliance disclosures between the publisher and the advertiser.

Practical Compliance Steps for Advertisers and Publishers

Businesses engaged in native advertising—whether as brands, agencies, or publishers—should take the following steps to manage FTC compliance risk:

• Audit existing content. Review all current native advertising placements to confirm disclosures are present, prominent, and clearly worded.
• Update influencer agreements. Any contract with a blogger, social media influencer, or content creator should expressly require FTC-compliant disclosures and prohibit the appearance of editorial independence when paid consideration is involved.
• Train marketing and content teams. The people creating and approving native advertising content need to understand that disclosure requirements are legal obligations, not optional style choices.
• Review publisher agreements. If your brand purchases native placements, ensure your agreements with publishers specify disclosure placement, language, and responsibility.
• Test on mobile. Disclosures that are visible on desktop may be invisible or ambiguous on mobile screens. All disclosures should be reviewed across device types.

The Relationship Between Native Advertising and Endorsement Guidelines

The FTC’s 2015 Native Advertising Policy Statement must be read alongside its Endorsement and Testimonial Guides, 16 C.F.R. Part 255, which were substantially updated in 2023. Those guides require clear disclosure any time there is a “material connection” between an endorser and a brand—including when influencers receive free products, payments, or other compensation in exchange for posts. A sponsored post on Instagram that looks like an organic recommendation is native advertising subject to both sets of requirements. The disclosure “#ad” or “#sponsored” placed at the end of a long caption, below the “more” fold, does not satisfy either standard.

For more information about the Policy Statement and how it could impact your advertising, contact Revision Legal’s Corporate attorneys through the form on this page or by calling 855-473-8474.