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About a year ago,
NAD issued two important companion decisions addressing the
impact of affiliate links on editorial content and whether such
links could transform editorial content into advertising. NAD
looked at Buzzfeed's "Shopping Guide" and determined
that it did not constitute "national
advertising" notwithstanding the inclusion of purchase links
in the Guide that provide compensation to Buzzfeed in some
instances.
In coming to this determination, NAD was guided by the fact that
(i) the product content in BuzzFeed's guide was selected by the
editors without the input of the business team regarding the
potential for affiliate link revenue; (ii) the retailer and brand
did not have any say in the content – before or after its
publication – and; (iii) the affiliate links were added to
the "shopping guide" after the editorial content was
completed. Therefore, NAD determined, the content was not
tied to the "economic or commercial motivation" that
"could, under different circumstances, be introduced by the
presence of affiliate links." Thus, NAD found that
BuzzFeed's Shopping Guide content regarding the skincare
product was not a "paid commercial message" and,
therefore, not national advertising as defined by NAD's
procedures.
Now, in another routine monitoring case, NAD has had the
occasion to apply "The Buzzfeed Factors" in examining an
article on AOL.com by Verizon Media. NAD requested
substantiation for statements in the article about Inkey List
Retinol Serum, a wrinkle treatment product. As in the
Buzzfeed case, Verizon Media argued that NAD lacked jurisdiction
because the article did not constitute "national
advertising" as defined by NAD's procedures.
NAD noted initially that "the line between advertising and
editorial content is not always clear." It also noted that it
was concerned about whether the article was in fact a paid product
placement in which case Verizon Media would be responsible for
supporting the strong performance claims for the products contained
in the article. Thus, NAD had to determine whether, "the
content was motivated by commercial considerations – i.e.,
the revenue from affiliate links."
Applying The Buzzfeed Factors, Verizon Media argued – and
NAD accepted – that its editorial and business operations are
separate: (i) the editorial and business staff are comprised of
different people; (ii) the content in the article was derived
solely from the editorial staff with no input from the business
staff; and (iii) the recommendations were based on the
product's reviews and general reputation, as well as the
editorial staff members' personal experiences. Moreover,
as to the affiliate links themselves, Verizon Media stated that the
editors chose them after the content was complete and that the
editorial staff, though aware that Verizon Media has deals with
retailers, did not know the monetization details (e.g., commission
rates) so they did not know which links would be more profitable
than others. Consequently, Verizon Media argued, the editorial
staff would not have an incentive to promote one product over
another. In addition, Verizon Media assured NAD that product
recommendations were not changed after the fact based on the
availability of affiliate link revenue.
Thus, NAD concluded that Verizon Media sufficiently
"separated editorial and business considerations such that the
content in the article was not driven by revenue from affiliate
links but solely the editorial staff's opinions about the
products." As a result, the article did not constitute
"national advertising" and NAD declined jurisdiction and
administratively closed the case.
The key takeaway here is that NAD's focus is clearly whether
affiliate links that result in commissions influence the editorial
content. If so, the content itself becomes advertising.
Thus, publishers who want to ensure that their editorial
content is always considered editorial, even if monetized with
affiliate links, and brands who want to ensure that the editorial
content they're sponsoring, or placing affiliate links in, is
not treated as their advertising, must implement policies and
practices that demonstrate and support the traditional separation
between editorial functions and advertising directives. And, of
course, any affiliate relationships must be clearly and
conspicuously disclosed!
This alert provides general coverage of its subject area. We
provide it with the understanding that Frankfurt Kurnit Klein &
Selz is not engaged herein in rendering legal advice, and shall not
be liable for any damages resulting from any error, inaccuracy, or
omission. Our attorneys practice law only in jurisdictions in which
they are properly authorized to do so. We do not seek to represent
clients in other jurisdictions.
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