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The Cookie Jar
Native advertising or a naive audience – which needs protection?

While those who reached adulthood before the dawn of the world wide web may feel happier paying for a newspaper that really is paper, many of the rest of us feel increasingly entitled to access entertainment and information for free, online.  However, on the basis that journalists and other providers of online content cannot all be philanthropic hobbyists with too much time on their hands, somehow the vast quantity of news, entertainment and instructional content that is freely available online must be paid for.  In many cases, of course, it is advertising that fills the online funding void, but if this arrangement means we have to watch five seconds of advertising before we can click to skip forward to the kitten-in-a-lion-costume video we really wanted to see, we complain. 

So what’s the answer for cost-sensitive consumers of online content?  What about advertising that we don’t even realise we’re consuming – could that provide a solution?  Native advertising (sometimes called “contextually targeted branded content”) is advertising which blends into its context; it doesn’t look out of place within its editorial surroundings.  While native advertising has the positive attribute that it is less likely to disturb our viewing/reading experience than other forms of online advertising (such as pop-ups and distracting banners), it raises a difficult question for advertising regulators: when does “blending in” become camouflage?

Two adjudications from the Advertising Standards Authority (“ASA”) in 2014 helped to establish guidelines for UK advertisers considering going native, but the CAP Code1  rules which underpin those guidelines have been around for a number of years.  First of all, marketing communications must be obviously identifiable as such – this requirement must be fulfilled without the consumer having to take any investigative step, which would include opening an envelope or email, or clicking to view a YouTube video.  Secondly, marketing communications must not give the false impression that the communication originates from someone acting as a consumer – for example, if a celebrity has been paid to make a particular statement about a product, this must be clear.  Finally, marketing communications which look/sound like editorial content (e.g. full-page “advertorial” features in magazines) must be clearly labelled as advertisement features. 

Even before the emergence of what is now called native advertising there were instances where the boundaries between advertisement features and genuine editorial were rather blurry; for instance, when a food critic writes about a new restaurant after being invited to sample a free three-course meal at the restaurant.  Therefore, for some time the ASA and Committee of Advertising Practice have used a two-pronged test to assist in clarifying these potentially blurry boundaries.  Something that looks/sounds like editorial is actually an advertisement feature if: 1. any form of payment (not necessarily monetary) has been given in exchange for the feature’s publication; and 2. the publisher of the feature has handed over editorial control of the feature to the entity making the payment.  This two-pronged test is also relevant when considering the regulation of native advertising, as explained below.

The first key ASA adjudication of 2014 regarding native advertising concerned an entity called Outbrain, which places links to third party content on the websites of online content providers such as newspapers.  In light of the facts that 1. the owner of the linked content pays Outbrain for the placement of the links and 2. the entity making the payment to Outbrain controls the linked content, the links placed by Outbrain are considered to be advertisements.  Therefore, the Outbrain links must be obviously identifiable as advertisements.

The Outbrain links investigated by the ASA each consisted of a photograph and a headline, and a number of photograph-headline pairings were grouped together within a box headed “You may also like these”.  In addition, at the bottom of the box was the text “Recommended by” next to Outbrain’s logo.  The logo changed colour when a user hovered their cursor over it, and when the logo was clicked a pop-up appeared which explained that “Links to 3rd party content were paid for by an Outbrain customer”.  The ASA decided that the overall presentation of the Outbrain links did not make it obvious to consumers that the links had been paid for by third parties and were therefore advertising, meaning that the presentation of the Outbrain links breached the CAP Code.  Following the ASA’s decision, Outbrain now provides links to third party content within a box headed “Promoted Stories” rather than “You may also like these”.

Later in 2014, Mondelez, owner of the Oreo cookie brand, was also found by the ASA to have failed to make its marketing communications obviously identifiable as such.  Mondelez had paid a number of video bloggers (or “vloggers”), whose respective YouTube channels all attracted a large number of viewers, to post a video of themselves taking part in a “lick race” with Oreo cookies.  Within each of the videos reference was made to the vlogger being contacted by Oreo and it was mentioned that Oreo had supplied the Oreos for the purpose of the “lick race” video.  In addition, text associated with each of the videos, which was revealed when a “show more” button was clicked, read, “Thanks to Oreo for making this video possible”, or similar.

Given that Mondelez had paid the vloggers to produce the relevant videos, and that Mondelez gave the vloggers a brief to work to in producing the videos, the videos were advertisements.  Therefore, the question arose as to whether the videos were obviously identifiable as advertisements.  In its consideration of this question, the ASA made the point that YouTube videos should be considered differently to, for example, TV advertisements within a commercial break in live programming, because there is an expectation among viewers that YouTube videos will be editorial-based.  Therefore, YouTube videos with commercial intent must do more than TV commercials to make clear that they are advertisements.

The ASA had two main issues with the Mondelez vlogs: 1. that the references (both within the videos themselves and within associated text) to the Oreo brand’s involvement did not go far enough to make clear that the brand had both paid for and directed the content; and 2. that no indication of the videos’ commercial intent was provided prior to the viewer’s engagement with the video (i.e. clicking on the video to view it).  At the same time as the ASA published its adjudication on the Mondelez vlogs, the Committee of Advertising Practice published guidance on how to ensure vlogs with commercial intent comply with the CAP Code.  The guidance carries two main messages.  First of all, unless the style of a vlog makes it very clear to the viewer that the vlog is an advertisement, vlogs with commercial intent must be clearly labelled as advertisements.  Secondly, wherever such labelling is required, it must be visible prior to consumer engagement.  In the Mondelez case, given that the ASA decided the style of the videos did not make clear that the brand had both paid for and directed the content, the guidance from the Committee of Advertising Practice suggests that the text accompanying the link to the video should have included the word “advertisement” or similar.

Looking forward, it seems possible that the increased scrutiny on native advertising will make it more difficult for online content providers to find advertisers to fund their content provision – if advertisers are not able to use innovative means of gaining the attention of internet users, advertising spend may be diverted to other activities.  If this, in turn, leads to a decline in the quantity and/or quality of freely available online content, will it be a price worth paying for advertising that is obviously identifiable as such?  It’s possible that regular consumers of free online content would disagree.

1 The UK Code of Non-broadcast Advertising, Sales Promotion and Direct Marketing

Andrew Butcher