Like the FTC, NAD has long been interested in the product review ecosystem and, in particular, in review sites that purport to be impartial and independent. As NAD has often noted, consumers assign significant credibility to information provided by review sites when making their purchasing decisions and, therefore, "when information obtained from a review site is not impartial and independent but rather influenced by a commercial relationship, the reliance consumers place on such information may result in concomitant harm."
At issue in its latest case is a site operated by Smile Prep, challenged by SmileDirectClub, a maker of clear alignment (invisible braces) products. The site provides information to consumers about teeth straightening and teeth whitening products and services and ranks and rates clear aligner products. As described by NAD, the site, which has affiliate relationships with several companies whose products are reviewed, presents its content as editorial, based on "honest, impartial assessments of its editorial staff and independent from any bias or control from the clear aligner companies," as well the unbiased and honest opinions of consumers with experience using the products.
SDC argued that while Smile Prep presents the reviews as impartial, they are not: rather, SDC says, "the clear aligner companies reviewed by Smile Prep are forced to either pay affiliate link commissions to Smile Prep or be unfairly disadvantaged in Smile Prep's rankings and reviews." Smile Prep countered by arguing that there is a separation between the editorial staff doing the rankings and review and the staff handling the affiliate relationships and that the affiliate partners have no right to review or approve the site content. Therefore, Smile Prep argued, the content is true editorial and NAD has no jurisdiction to address it.
NAD rejected Smile Prep's challenge to NAD jurisdiction on two very important bases: (1) although Smile Prep is not selling products and the content is available for free, "a sale is not necessary for content to be considered advertising". Further, the advertiser's claims about the independence and genuineness of its reviews "promote its review content and persuade consumers of the value of the service that the Website provides" and is therefore advertising for the site; and (2) although Smile Prep's content is not the clear aligner companies' own advertising, since those companies did not pay for, disseminate, approve, or otherwise control the product claims, the content is "advertising" because of the impact of the affiliate links.
In making this latter determination, NAD distinguished Smile Prep from two of its earlier cases involving affiliate links, BuzzFeed and Verizon Media. In those cases, NAD considered whether product claims in online publishers' product reviews were advertising and determined that they were not, notwithstanding the presence of affiliate links in the reviews. In both cases, NAD found that the publishers created product recommendations independent of any "economic or commercial motivation" introduced by affiliate marketing revenue and that the affiliate link was not placed in paid-for advertising. Rather, as NAD determined in the BuzzFeed case, the "primary economic motivation behind [BuzzFeed's] product recommendations was the same as the motivation behind its other digital news and entertainment content—to attract page views and develop a readership."
Here, however, the Smile Prep content is updated (even if not originally posted) by editorial staff with knowledge of which companies have affiliate links. Further the "editorial team is also aware that revenue generated from affiliate commissions is a primary source of funding for the Website's operations (including writer salaries)." Smile Prep itself acknowledges on the site that affiliate relationships affect the site content, including by promoting deals and discounts for its affiliate partners' products. Accordingly, NAD determined that the product claims are a paid commercial message and, thus, "national advertising" subject to NAD review.
Further, in a statement with potentially far-reaching implications, NAD cautioned that if a publisher site does not maintain appropriate controls to separate its editorial team from the influence of affiliate revenue, "the content can be influenced by knowledge of payment, rendering it advertising." While maintaining this separation may be challenging for publishers hosting review sites, particularly publishers with small staffs, "the burden on publishers is outweighed by the consumer interest in truthful and transparent advertising. Consumers should not be misled by product reviews that appear to be independent and impartial, but which are influenced by the relationship between the publisher and the product being reviewed."
Having determined that the site is "advertising" and subject to its review, NAD then analyzed the specific claims challenged by SDC about the site's review methodology and impartiality, and recommended modifications. It also recommended that Smile Prep clearly and conspicuously disclose that Smile Prep's rankings, reviews, and product information are advertising. With respect to the consumer reviews posted on the site, while NAD recommended that Smile Prep clearly disclose the material connection between the reviewers and Smile Prep (i.e., the incentive paid for the reviews), it did find that Smile Prep's collection, moderation, and posting practices provide a reasonable basis of support for its implied claim that its reviews reflect the real experiences of legitimate clear aligner consumers: all reviews are posted, positive and negative; incentives are offered for reviews for both affiliate partner products and non-partner products; and reviews are not edited or curated to highlight only the positive.
The Decision also addresses specific product claims, not addressed here. (But if you're in the dental product business, you'll want to review the Decision in full). The Advertiser Statement indicates that Smile Prep plans to appeal the Decision to the NARB.
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