Fresh off the FTC’s Native Advertising workshop this past December, the National Advertising Division (NAD) of the Council of Better Business Bureaus recently reviewed an article published by American Media Inc. in its Shape Magazine which included a recommendation for its SHAPE Water Boosters. The recommendation appeared in an article about the importance of staying hydrated under a “news” heading. The fact that the article contained advertising for a product sold by the publisher was not disclosed anywhere on the page. Shape argued that readers understood the financial connection between a SHAPE-branded product and the publisher of Shape magazine, and as such no disclosure was necessary. It pointed to the FTC’s Endorsement and Testimonial Guides and maintained that the material connection was obvious to consumers. While the NAD agreed with Shape’s assertion, it took issue with the fact that the Shape-branded products were recommended in an editorial context. It reasoned that consumers were likely to place greater weight on recommendations in an editorial context as opposed to those made in an advertising context. As a result, consumers may reasonably believe that the recommendation was independent of the sponsoring advertiser’s influence. For these reasons, the NAD recommended that Shape clearly and conspicuously label content as advertising when it promotes SHAPE-branded products within the content.

TIP: As native advertising becomes more prevalent, advertisers should ensure native advertising is conspicuously labeled as such, keeping in mind that consumers may place more weight on product recommendations made in an editorial context.