NAD recently recommended that Internet-based advertiser Taboola modify its practices of labeling ad blocks with leads such as “Recommended Videos,” “More in the News,” “From the Web,” and “You May Like.” NAD found that these leads communicate that the linked content is editorial and is being recommended to the consumer by the publisher or host site. NAD pointed to the FTC’s 2013 letter to search engines highlighting guidance on distinguishing natural from sponsored (paid) search results, noting that Taboola had an obligation to clearly and conspicuously disclose to consumers when it was linking to sponsored content.

In certain instances, Taboola identified sponsored ad blocks as “sponsored content” or “promoted content.” However, NAD further determined that Taboola’s existing “sponsored content” and “promoted content” content disclosures were inadequate because they were in light typeface, in smaller font than other text surrounding the ads, and were placed on the top-right corner of the blocks. Thus, these disclosures did not comply with the FTC’s guidance to search engines, which recommends placing any text label immediately in front of a sponsored search result or in the top-left corner of an ad block in adequately sized and colored font. Notably, In NAD’s view, Taboola’s disclosures were inadequate even with the inclusion of the sponsor’s name below each content title.

Finally, while NAD did not go as far as to mandate the use of one specific term to label all native advertising, it did caution that the thumbnail photographs, article title, and name of the destination site should be truthful and non-misleading. This means that to the extent Taboola may link consumers to sites that must themselves be labeled an “advertisement,” it must disclose that the link leads to an advertisement.

TIP: Advertisers should ensure native advertising is clearly and conspicuously labeled as such, keeping in mind regulator’s concerns that consumers may place more weight on product recommendations made in an editorial context.