Wading into the hot topic of native advertising, the National Advertising Division (NAD) recently reviewed Qualcomm's sponsorship of a series of tech-related articles featured on Mashable.com.
Qualcomm advertised its Snapdragon processors (microprocessors used to power the functions in portable electronic devices, particularly cell phones and tablets) with a series of 20 articles titled "What's Inside?" on the Mashable site. According to Qualcomm, the series was designed to explore the components inside technology like Tesla cars, electric guitars, and the Mars Curiosity Rover.
The articles included a yellow bar indicating that the content was sponsored and an indication on the index page for the series that it was "supported by Snapdragon." When the sponsorship ended, those notices disappeared, piquing the interest of the NAD.
The self-regulatory body indicated its concern that advertising should be distinguished from content. "Advertising in non-traditional formats, including sponsoring a series of articles in an online news source, poses some new challenges, including when and how an advertiser has to identify a sponsored article or series of articles as advertising," the NAD wrote.
Advertisers should be guided by the general principles that differentiate content and advertising, as it "is a well-accepted principle that advertising must identify itself as such . . . Advertisers must identify a message as advertising even when the content does not mention a specific product or service."
To avoid misleading consumers, advertisers must disclose their sponsorship, even if the content simply conveys information about an issue with which the advertiser wants to be associated, the NAD said. Because consumers attach different significance to sponsored material, the failure to disclose such a sponsorship could therefore be considered deceptive.
According to the decision, "the article series, 'What's Inside?' stirs consumer interest in the technology that powers electronic devices, an interest which potentially could benefit Snapdragon. Although the articles in the series never discuss devices powered by Snapdragon processors, the article series may inspire curiosity in the technology that powers cell phones, and provide an opportunity to market Snapdragon processors."
Nonetheless Qualcomm ads appropriately disclosed itself as the sponsor of the article series because of its commercial purpose.
However, Qualcomm was not involved in the planning, creation, or posting of any of the articles in the series, none of which discussed Snapdragon or devices that contain the microprocessors. And the company only removed its name from the articles when its sponsorship ended. Because of these facts, the sponsorship was "more like an advertisement that ran with the article for a period of time, rather than content written with a commercial purpose for the advertiser," the self-regulatory body wrote.
The removal of Qualcomm's identification when the sponsorship ended was also acceptable, "as the content was independently created before the sponsorship began and controlled by the publisher," making it unnecessary for the advertiser to continue to identify itself as the sponsor.
To read the NAD's press release about the decision, click here.
Why it matters: Advertisers should be on notice that the NAD is monitoring the native advertising issue. "These are issues of concern for us," Laura Brett, a staff attorney at the NAD, told Ad Age about the decision. "We want to make sure the industry is doing what it's supposed to do." The action also serves as a reminder that the general principles that distinguish content from advertising remain in play, even in nontraditional formats. "Advertisers may be required to identify a message as advertising even when the content does not mention a specific product or service as consumers can be misled when an advertiser conveys a commercial message without disclosing that it is the author of the message," the NAD cautioned. Native advertising is on the Federal Trade Commission's radar as well. Earlier this year, the FTC warned search engines that ads and sponsored listings must be distinguished from "natural" results. The FTC plans to host a workshop on native advertising on December 4, 2013.