Keeping a close eye on native advertising, the National Advertising Division recently reviewed an article in Shape magazine that suggested readers could benefit from a Shape-branded product.

The September 2013 issue of Shape magazine featured a new line of products branded with the Shape name. Under the caption “news,” a story called “Water Works” discussed the importance of staying hydrated. It also recommended Shape Water Boosters, a flavored supplement added to water, as an aid to hydration.

“The obvious solution is to stick with water, but about 20 percent of Americans reportedly don’t like the taste. If that sounds like you, check out the new Shape Water Boosters,” the text of the story read. “Just a single squeeze…adds delicious flavor – but not calories – along with a concentrated punch of nutrients that offer some important bonus benefits.”

The NAD determined that the context in which Shape recommended its product “could mislead or confuse consumers to believe that the recommendation is an independent editorial assessment.”

American Media, Inc., Shape’s publisher, argued that since the “sophisticated readership” of the magazine can and does understand the connection between the publication and the products, it was under no further obligation to define the promotion of its product separately as an advertisement. The magazine often features recommendations, the publisher added, and an editor’s note on page 22 of the September issue noted that Shape was promoting its own products.

The NAD said that was not enough.

“Advertising that appears in an editorial context has the potential to mislead or confuse consumers because consumers may attach a different weight or significance to editorial content than to pure advertising content,” the NAD said. “Although consumers reading Shape magazine may be aware that Shape Water Boosters are related to Shape magazine, those same consumers can reasonably attach different weight to recommendations made in an editorial context than recommendations made in an advertising context. Put another way, consumers may reasonably believe that editorial recommendations in Shape magazine are independent of the influence of a sponsoring advertiser.”

The editor’s note was insufficient to alert consumers that the article was an advertisement, the NAD added, because it was not in close proximity to the main claim in the story and could not be read at the same time.

Therefore, Shape should “clearly and conspicuously designate content as advertising when it promotes Shape-branded products,” the NAD concluded.

To read the NAD’s press release about the decision, click here

Why it matters: Like the Federal Trade Commission, the NAD has native advertising on its radar. Last September, the self-regulatory body took its first stab at the issue when it reviewed Qualcomm’s sponsorship of a series of tech-related articles featured on Mashable.com. The NAD noted that such advertising “poses some new challenges” and determined that Qualcomm had properly disclosed itself as the sponsor of the article series. In a second case, the NAD recommended that eSalon, the maker and seller of an at-home hair-color product, modify or discontinue certain social media practices in order “to avoid confusion” for customers. The eSalon decision cautioned advertisers to follow FTC guidance and adhere to the general principle that advertisers “are required to identify a message as advertising when it appears in a context that consumers may reasonably understand to be editorial content.”