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NAD Considers Retailers Native Advertising

On December 22, 2015, the Federal Trade Commission (“FTC”) issued the Native Advertising: A Guide for Business (the “Native Advertising Guide”). The Native Advertising Guide was published to help companies determine when and how to disclose what content is native advertising.

In its first decision considering native advertising since the Native Advertising Guides were issued, as part of its routine monitoring, the NAD reviewed advertising by Joyus, Inc., an online shopping retailer. Joyus is an e-commerce platform for lifestyle products including fashion, beauty, personal care, fitness and home products. Joyous brings consumers online shopping using videos to showcase new products. 

One of the products advertised by Joyus was “Dr. Brandt’s Needles No More Wrinkle Relaxing Cream."  People Magazine and Joyus partner to create content and videos which appear under “Stuff We Love” in People Magazine online. People Magazine editors choose which products are featured and help create descriptions and videos that promote Joyus products, and the featured products are promoted for sale by Joyus. More specifically, consumers viewing online can click on “Stuff We Love” which brings readers to a list of videos that the consumer can watch. The videos, in turn, promote a product available for purchase. Once the video begins playing, the video itself is labeled “Joyus” and contains elements which indicate it is shopping video, including promotional offers, free shipping, and a shopping bag icon. 

Although, after a consumer clicks on the video link, the videos themselves contain visual and audio cues that make it clear consumers are viewing a shopping video, the NAD held that the pages and links consumers see before viewing the Joyus video reasonably convey the message that the linked content is editorial content. For example, the “Style” page link to “Stuff We Love” did not disclose that the “Stuff We Love” feature is a partnership between People and Joyus and that it promotes products for purchase. When a consumer landed on “Stuff We Love”, the list of items with “Watch” links that lead to videos did not indicate that products or services are for sale in the video link. Overall, consumers do not know that “Stuff We Love” is promoting products for sale before watching the shopping video and as a result, consumers could give greater weight to claims made in the product descriptions than they would if they knew it was a form of advertising. As a result, NAD recommended that Joyus (in collaboration with People Magazine) revise the link to advise consumers that the content to which they are linking is an advertisement or a “shopping” link, and more specifically that the disclosure be made before consumers reach the “Stuff We Love” page and before the video begins running. 

The NAD’s decision in the Joyus/online People Magazine matter illustrates the Native Advertising Guides’ focus that advertisers are prohibited from using “deceptive door openers”, and that advertisers must clearly identify an advertisement before consumers reach the message, in particular here where the advertiser sells good by way of partnerships and links to the shopping site itself.  

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