Driven by the evolution of technology and social media, brand advertisers are increasingly turning to “native advertising” -- a form of paid media in which promoted content is woven into the actual visual design, or fabric, of a website, magazine, or newspaper. The theory is that by providing ads in the context of a user’s experience, and designing content that blends in with the media in which it is placed, the promoted content is less intrusive, and more likely to capture the attention of consumers.
Of course, because native advertising necessarily blurs traditional lines of editorial and advertising content, regulators have begun to more closely scrutinize the practice, and have expressed concerns about the potential for consumer deception. Earlier this year, for example, the National Advertising Division (“NAD”) examined a campaign from Qualcomm, in which it ran banner ads for its Snapdragon processor adjacent to a series of articles that it had sponsored on the Mashable website. For the duration of the campaign, the banner ads included a tag indicating that Qualcomm had sponsored the articles. Once the campaign concluded, however, the tags were removed (even though the articles remained live on Mashable).
The removal of this information raised concerns at the NAD, and prompted an inquiry as to whether Qualcomm had a continuing obligation to inform readers of the sponsorship. Ultimately, the NAD concluded that because (1) Qualcomm did not influence the content of the articles; (2) the articles were created before the sponsorship started; (3) none of the articles addressed devices that contained Snapdragon components; and (4) Mashable regularly produces similar content regardless of the sponsorship, Qualcomm did not need to take any further steps to “identify itself as the sponsor after the sponsorship period ended.”
The NAD’s decision is an important step in preserving the future of native advertising. Some questions remain, however, about the limits and effectiveness of commingling marketing messages with editorial content. Importantly, the Federal Trade Commission is set to hold a native advertising workshop December 4, 2013, so additional restrictions or rules might be just around the corner.