Native advertising can be traced as far back as Benjamin Franklin's Poor Richard's Almanac and the FTC has been, in one way or the other, regulating it since 1917. So 2015 seemed like a good year to finally issue some guidance. I read the FTC native advertising guidelines, as well as the meeting transcript from the 2013 workshop that shaped them and thought, "these are great! How helpful! Problem solved!"
And then I read this: "For the FTC to continue to really try to put boundaries and guidelines around words is really a reactionary way of doing things. I would rather the FTC put some stakes in the ground and develop some general concepts that we can look at and deal with . . . . If the FTC puts these guidelines around existing words, we are just going to create a new set of words and a new lexicon out there the FTC has to react to again in five or ten years.”
That was Jim Hanna, Starbuck's Director of Environmental Impact, reacting to another set of guidelines published by the FTC in response to another tricky issue in the world of advertising: "greenwashing," or making environmental marketing claims that aren’t true.
The FTC published its first ever guidelines against greenwashing – commonly called the “green guides”-- in 1992. They were revised again in 1996 and 1998. In 2009, the FTC made a prepared statement to the U.S. Senate called “It’s Too Easy Being Green” (If you read enough FTC testimonials, you realize someone there really has a sense of humor) before again revising the guidelines in 2010 (the green guides were left untouched for the entirety of the Bush administration, showing how sensitive the FTC is to presidential priorities) and was most recently updated in 2012.
But the green guides don't really seem to be working. In 2009, eighteen years after the first guidelines were published, a Canadian environmental marketing group named Terraforma reviewed 2,219 products in “big box” stores. Greenwashing continued to be incredibly common (kind of like sketchy native advertising seems to be incredibly common). Ninety-eight percent of the products were guilty of some form of greenwashing. Cleaning paper, toys, cleaning products in general, health and beauty products, and baby care products were the worst offenders.
So what can the FTC learn from the green guides - which seem to be a resounding failure - that can inform their Native Advertising guidance?
The first is that coming up with example scenarios and lists of "no-no" words is the wrong approach. Something more holistic is called for.
The second is that sometimes guidelines clearly aren't enough. "If the Federal Trade Commission decided to audit publishers' native ads today, around 70 percent of websites wouldn't be compliant with the FTC's latest guidelines" (Adweek). Prosecuting wrongdoing has been a big challenge for the FTC (although their website reads like a court room calendar, so I give them credit for trying). Courts often don't have any experience prosecuting communications law. They lean heavily on FTC guidelines (which are not law) and then let companies escape prosecution if they haven't specifically enacted a problematic scenario or used a bad word as outlined by the FTC. What's needed is more spirit of the law, less letter.
The FTC should closely examine the performance of its green guides as it produces future regulation for the advertising industry. Whether it's native advertising or greenwashing, what's ultimately at stake is consumer trust. And when consumer trust is violated, brands may make short term financial gains, but they ultimately undermine the economic viability of their market.
