Even When the Connection is Obvious, Publishers Should Consider Disclosures in Native Advertising

Recently, a publisher’s article about its own branded products was caught in the headlights of a decision by the National Advertising Division (NAD).  An article in Shape magazine discussed the health benefits of staying hydrated and described attributes of Shape-branded products called “Shape Water Boosters.”  NAD, a division of the Advertising Self-Regulatory Council administered by the Council of Better Business Bureaus, agreed with the publisher/advertiser that Shape’s readers are “well-educated and sophisticated” and “have become accustomed to [the informational/endorsement] format and expect and utilize the recommendations in the magazines they purchase to help them make validated lifestyle decisions.”  However, NAD took issue with the article because it was labeled with the heading “News” and formatted to appear as a news article.  NAD found that readers “generally attach different significance to recommendations made in an editorial news article than they would if the same recommendations were made in an advertising format.”  

In contrast to its prior cases about native advertising, this most-recent NAD case concerned an article in the print version of Shape magazine, rather than online content.  Also, it indicates that even if the publication and the product discussed bear the same brand name, if the context, formatting, or title make it such that readers generally would assign the content greater weight than something that looks like more traditional advertising, clear and conspicuous disclosures may be needed.

Obviously, native advertising - blending advertisements with news, entertainment, and other content – raises unique issues about the placement and content of disclosures that identify a connection between the publisher and the products being discussed.  Native advertising – or sponsored content – raises many other legal issues, as well.  Attorneys from InfoLawGroup attended the Federal Trade Commission’s workshop on Native Advertising held in December, and it is clear that although many issues remain unclear, this is a high-priority topic for regulators and self-regulatory groups such as the NAD. 

Native advertising presents unique questions for advertisers, as well as publishers in both the digital and print world.  If the product information is presented to consumers in a way that may have them thinking differently about the information or assigning more weight to its value, consider disclosing that the material is advertising - and keep in mind that there are marketing-savvy ways to do so.