If there is one takeaway from yesterday’s panel on native advertising, it’s that sponsored content is not going anywhere in the foreseeable future. Although NAD has talked about it before, the FTC has held a workshop to address it, and of course, we’ve blogged on it, native advertising is still a hot topic. Native advertising, a form of sponsored content, is a fast-growing method for promoting products.
As explained by Diedre Sullivan, Senior Counsel to the New York Times Company, one of the threshold questions in sponsored content is whether the piece is, in fact, commercial speech. Under the umbrella of sponsored content are a number of types of native advertising, such as content written and provided exclusively by the advertiser, versus content created by the publication with subjects of interest to the advertiser but without the advertiser’s direct input (branded content), or content written jointly by the advertiser and the publication (sponsored content). If the content is exclusively editorial, it is afforded higher protection than commercial speech. However, the question for advertisers is not generally whether the piece is an ad but instead how to disclose.
According to Mary Engle, Associate Director for Advertising Practices at FTC, the FTC is set to release a report on native advertising by the end of this year. In the meantime, questions remain about when, where, and how disclosures must be made, and the industry will need to look to the Dotcom Disclosures and Endorsements and Testimonials Guide. However, a disclosure such as “PAID POST” and a sub clarifying that the content was generated by a sponsor or an advertiser, rather than the publication itself, may suffice to properly disclose the commercial nature of the content.
But wait – how is this different from an adjacency, an audience member asked. After all, wouldn’t the same effect be achieved if the publication wrote a story on a relevant topic and an advertiser simply purchased ad space next to the story? A few factors distinguish an adjacency from a paid-for article, according to the panel. For example, part of the analysis may be that the advertiser is creating the demand for the product through the native advertising piece. And, of course, the advertiser has approval power for the paid content, which it would not have over an article with an adjacent ad.
For now, the question may be what a reasonable consumer would understand the content to be. Under guidelines established by the American Society of Magazine Editors, if an advertisement could be mistaken for editorial content, then it should be clearly labeled, and if an ad appears on multiple pages, the disclosure should appear on every page. Further, the Interactive Advertising Bureau created a Native Advertising Playbook, which recommends disclosures in order to make clear to consumers what is paid advertising versus editorial content. As it stands, and until the FTC issues further guidance in the area, disclosure seems to be the name of the game.