FTC Says Sponsored Online Ads Can Be Misleading

Advertising that portrays itself as independent, unbiased reporting is drawing increased scrutiny from the Federal Trade Commission, officials said, warning of a more vigilant campaign against a deceptive practice that dates back a century but has grown more aggressive on the Internet.

Digital advertising, which has the ability to target specific audiences and individuals, has led to a boom in the popularity of what is known online as native advertising, paid links or sponsored content. Those features have previously gone by such names as advertorials or infomercials. But that growth has led to concern among consumer protection officials, at the FTC and elsewhere, that the commerce-driven content can mislead consumers, at times even when the information is labeled advertising. “The delivery of relevant messages and cultivating user engagement are important goals, of course,” Edith Ramirez, the chairwoman of the FTC, said at a conference the agency held to discuss native advertising. FTC officials said that recent surveys on online publishers revealed that 73 percent offered native advertising opportunities on their sites, and that an additional 17 percent were considering offering them in 2013. About 41 percent of brands and one-third of advertising agencies use native, they said.