Native Advertising: A Guide for Businesses

"Marketers and publishers are using innovative methods to create, format, and deliver digital advertising.  One form is “native advertising,” content that bears a similarity to the news, feature articles, product reviews, entertainment, and other material that surrounds it online.  But as native advertising evolves, are consumers able to differentiate advertising from other content?

The Federal Trade Commission Act prohibits deceptive or unfair practices.  It’s the FTC’s job to ensure that long-standing consumer protection principles apply in the digital marketplace, including to native advertising.  The FTC has issued an Enforcement Policy Statement on Deceptively Formatted Advertisements that explains how the agency applies established truth-in-advertising standards in this context.  This Guide for Businesses supplements the Enforcement Policy Statement by offering informal guidance from FTC staff to help companies apply the Policy Statement in day-to-day contexts in digital media..."
Native advertising

Enforcement Policy Statement on Deceptively Formatted Advertisements

"The Federal Trade Commission issues this enforcement policy statement regarding advertising and promotional messages integrated into and presented as non-commercial content. 1 The statement summarizes the principles underlying the Commission’s enforcement actions, advisory opinions, and other guidance over many decades addressing various forms of deceptively formatted advertising..."
Deceptive advertising

FTC Releases Reports on Cigarette and Smokeless Tobacco Advertising and Promotion
"The amount spent on cigarette advertising and promotion by the largest cigarette companies in the United States declined from $12.49 billion in 2006 to $10.86 billion in 2007, and again to $9.94 billion in 2008, according to a report released today by the Federal Trade Commission.

The largest spending category in both 2007 and 2008 was spending on price discounts
paid to cigarette retailers or wholesalers in order to reduce the price of cigarettes to consumers. This category accounted for $7.70 billion, or 70.9 percent of total spending on advertising and promotion in 2007, and $7.17 billion, or 72.1 percent of that total, in 2008.

The number of cigarettes sold or given away to wholesalers and retailers in the United States declined from 350.5 billion in 2006 to 342.8 billion in 2007, and to 322.6 billion in 2008..."

Potential Effects of a Ban on Direct-to-Consumer Advertising of New Prescription Drug
"Direct-to-consumer (DTC) advertising of prescription drugs has elicited various concerns. One concern is that DTC advertising may add to spending on drugs by consumers, insurers, and the federal government without providing enough benefits to justify that spending; specifically, some observers worry that DTC advertising encourages broader use of certain drugs than their health benefits warrant. Another concern is that DTC advertising for newly approved drugs may lead people to use
drugs whose potential risks were not fully discovered during the drug approval process. Those concerns have spurred recent proposals for a moratorium on advertising brand-name prescription drugs to consumers during the first two years following a drug’s approval by the Food and Drug Administration (FDA). Although such a moratorium would allow more time for safety concerns about a new drug to be revealed, it would entail health risks of its own, because some individuals who would
benefit from a new drug might be unaware of its availability in the absence of consumer advertising..."

FDA: ‘Bad Ad Program’ to Help Health Care Providers Detect, Report Misleading Drug Ads
"The U.S. Food and Drug Administration today launched a program designed to educate health care providers about their role in ensuring that prescription drug advertising and promotion is truthful, and not misleading.

The Bad Ad Program is an FDA-sponsored educational outreach effort administered by the agency’s Division of Drug Marketing, Advertising, and Communications (DDMAC), in the FDA’s Center for Drug Evaluation and Research.

“The Bad Ad Program will help health care providers recognize misleading prescription drug promotion and provide them with an easy way to report this activity to the agency,” said Thomas Abrams, director of DDMAC.

The program will be rolled out in three phases. In Phase 1, DDMAC will engage health care providers at specifically-selected medical conventions and partner with specific medical societies to distribute educational materials. Phases 2 and 3 will expand the FDA’s collaborative efforts and update the educational materials developed for Phase 1.

The FDA’s traditional regulatory activities for monitoring prescription drug promotion primarily rely on review of promotional pieces submitted to the agency by sponsoring drug companies, industry complaints, and field surveillance at large medical conventions. Although these efforts are effective, the agency has limited ability to monitor promotional activities that occur in private.

Health care professionals are encouraged to report a potential violation in drug promotion by sending an email to badad@fda.gov or calling 877-RX-DDMAC. Reports can be submitted anonymously; however, the FDA encourages providers to include contact information so that DDMAC officials can follow-up, if necessary."