Last September, the National Advertising Division (NAD) published a decision assessing whether the editorial content surrounding an affiliate link constituted “national advertising” requiring substantiation. At issue were two statements in a BuzzFeed “shopping guide,” in which the author tested and recommended various skincare products. The NAD reviewed BuzzFeed’s internal procedures with respect to the editorial content and the affiliate link, and determined that the content did not constitute “national advertising” and was therefore outside the NAD’s jurisdiction.
But how would the FTC treat editorial content surrounding an affiliate link? The NAD acknowledged that the “FTC . . . does not directly address whether the act of placing an affiliate link next to content about the related product renders the content ‘advertising’ that requires substantiation.” The FTC recently ended its silence. In her remarks at the NAD West Coast Conference earlier this month, Mary K. Engle, the associate director of the FTC’s Division of Advertising Practices, indicated that the FTC would follow the same analysis the NAD conducted to determine whether “advertising” includes the editorial content surrounding an affiliate link.
The central question in the NAD decision was “whether online publishers using affiliate links can use the aegis of editorial independence to avoid the requirement that it have substantiation for any product claims in the content.” So how exactly did the NAD assess the statements in the BuzzFeed shopping guide? The NAD reviewed the BuzzFeed content within the framework established by the FTC in the 1988 R.J. Reynolds Tobacco Co. case (111 F.T.C. 539) to determine whether the speech was commercial. That framework considers:
“(1) the content of the speech, i.e., whether it contained a message promoting the demand for a product or service; (2) whether the speech referred to a specific product or service; (3) whether the speech included information about attributes of a product or service, such as type, price, or quality, including information about health effects associated with the use of a product; (4) the means used to publish the speech, including whether it is paid-for advertising; and (5) the speaker’s economic or commercial motivation.”
The NAD’s decision ultimately turned on the fifth factor. The shopping guide author wrote the content independent of the “economic or commercial motivation” an affiliate link would introduce. Essentially, neither the BuzzFeed business staff nor any retailer or brand representatives had any say in whether the author recommended the product or what was said about the product. And, the affiliate links were added after the editorial content was completed. In sum, the NAD found that the primary motivation for the shopping guide was to drive page views and foster reader engagement, which mirrors the primary motivation of other digital editorial content on BuzzFeed.
While this framework for analysis is certainly instructive, it is important to note that the NAD’s assessment came with a few caveats. Even though BuzzFeed kept the editorial operations apart from business operations, which the NAD deemed “sufficient in this matter, the enumerated elements of BuzzFeed’s process are neither exhaustive nor necessary to show that such content is not a ‘paid commercial message.'” Thus, for the time being, it appears that each challenge will be fact-specific and unique to the business operations of the publisher or advertiser involved. What the FTC does with that open door remains to be seen. Stay tuned.