Native Advertising Added to BBB Code of Advertising; Deceptive Native Ads Now Violate the Code

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Disguised sponsored content must be “clearly and conspicuously” labeled as an ad in all print, broadcast, and social media channels

Better Business Bureau has issued guidelines to advertisers that call for clear labeling when the design, style, and functionality of commercial messages mimic editorial content. The addition to the BBB Code of Advertising was announced yesterday at the Public Relations Society of America conference in Indianapolis, where BBB representatives were joined by the Federal Trade Commission in explaining how the new rules impact advertising, marketing, and public relations.

“Native advertising, sometimes called sponsored content, has become ubiquitous as a marketing tool,” said Katherine Hutt, BBB national spokesperson and moderator of the panel discussion at the conference. “These ads are often indistinguishable from editorial content, embedded into entertainment programming, incorporated into games, graphics, and social media. An ad that’s designed to fool consumers is – plain and simple – a bad ad, and violates our standards.”

The new addition to the BBB Code of Advertising closely follows enforcement policies recently announced by the Federal Trade Commission in the U.S. and aligns with the Competition Bureau in Canada, as well.

The new section #39 of the Code provides, in part:

  • Advertisers must not mislead consumers as to the nature or source of native ads they place, or cause to be placed, in any medium, including social media.
  • Where an advertiser promotes its products and services with sponsored content that consumers would not recognize as an ad, it must ensure that such content is clearly and conspicuously labeled as a “paid ad,” “paid advertisement,” “sponsored advertising content” or other similar words that state expressly that the material is an advertisement.
  • Where an advertiser sponsors content that does not promote its own product or service, it should consider including a disclosure such as “sponsored by” or “brought to you by” to avoid confusion.
  • Advertisers should maintain disclosures when native ads are republished by others in non-paid search results, social media, email, or other media.

The National Advertising Division (NAD) has already reviewed a number of cases of native advertising, and NAD attorneys have written and presented extensively on what is one of the hottest topics in the advertising industry. NAD is an investigative unit of the advertising industry’s system of self-regulation. Policies and procedures are set by the Advertising Self-Regulatory Council (ASRC) and administered by the Council of Better Business Bureaus.

This addition to the Code applies these principles to all advertisers, large and small, and BBBs across North America will begin enforcing the new section immediately. Businesses that fail to comply with the new provisions might not qualify for BBB Accreditation and face the possibility of a lower rating with BBB, with the most egregious cases losing enough to merit an F. When companies fail to make changes to questionable business practices, BBB often turns the cases over to state, provincial, or federal government agencies for enforcement.

BBB was founded in 1912 on a foundation of truth in advertising. For more than a century, it has served as a neutral third party to help businesses and consumers trust one another. Last year, BBB challenged nearly 8,300 national and local advertisements, from Fortune 500 companies to mom-and-pop shops, and educated millions of consumers about detecting bad ads (bbb.org/adtruth).

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About BBB: For more than 100 years, Better Business Bureau has been helping people find businesses, brands and charities they can trust. In 2015, people turned to BBB more than 172 million times for BBB Business Reviews on more than 5.3 million businesses and Charity Reports on 11,000 charities, all available for free at bbb.org. The Council of Better Business Bureaus is the umbrella organization for the local, independent BBBs in the United States, Canada and Mexico, as well as home to its national programs on dispute resolution, advertising review, and industry self-regulation.

Media Contacts: For more information, journalists should contact Katherine Hutt (703-247-9345 or khutt(at)council(dot)bbb(dot)org) or Linda Bean (212-705-0129 or lbean(at)asrc(dot)bbb(dot)org).

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Katherine Hutt
CBBB
+1 703-247-9345
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