How should companies disclose the nature of their relationships with publications they own or finance, and how prominent should those disclosures be? Those questions are increasingly being asked by readers and legal experts alike as a growing number of companies launch their own publications and media arms.
Some consumers say the connections between brand-owned publications and the companies behind them are not always made clear, potentially confusing audiences about who is ultimately paying for the content they publish. But from a legal perspective, the differences between editorial and commercial content remain ill-defined, experts say, making it difficult to establish what disclosures may or may not be required by law.
As more companies produce content and launch standalone editorial entities, it’s becoming increasingly unclear “when a piece of content is advertising or not, and – if it is – what kind of disclosures need to be made,” according to Robert Freund, who runs a law firm that works with e-commerce brands, marketers and talent agencies. “The [legal] line between commercial and editorial is not clearly delineated,” he said.
The Trade Desk is one of many companies facing questions from audiences around its owned and operated “trade publication” The Current. Some industry observers say The Current publishes stories that serve The Trade Desk’s own interests, while others argue it doesn’t do enough to make its ownership clear.
The Current’s presence at the Cannes Lions advertising festival this year highlights the debate. The Trade Desk has for years attended the Cannes Lions festival in a marketing capacity, but this year it’s attending in an editorial capacity as well. The ad tech company has sent editors from The Current to produce “thought-provoking journalism” from the festival, and to host panels and other events in a space on the Palais terrace carrying The Current’s branding, part of a broader Trade Desk presence.
“The Current has been active for more than two years and is not a new initiative. Its connection with The Trade Desk is well established in the industry, and it welcomes outside voices in a variety of formats, including opinion articles and podcast episodes,” a spokesperson for The Trade Desk said in a statement.
One of the key legal questions to be answered is when content should be considered editorial and when it should be considered advertising, say experts. In 2021, rapper Ice Cube claimed that stock trading app Robinhood used his likeness without permission to endorse its product. In his complaint, Ice Cube sued the company for publishing a picture of him in its popular Snacks newsletter. In the initial dismissal order, the judge in the case said that the newsletter was “demonstrably not an advertisement.” “Ice Cube is a celebrity. If the unauthorized use of his image suggested his endorsement of Robinhood, then he would suffer injury in fact. But the image and phrase are not an endorsement: they illustrate a point in the newsletter about a market correction in tech stocks.”
According to Freund, there are no specific rules around if disclosures are even legally necessary, but relevant factors may include, for example, if the primary motivation of publications is to sell a product or service.
Freund pointed out that even in the Robinhood case, the court didn’t clearly state that brand publishing should be treated as editorial. Even lawyers for Ice Cube pointed out in an opposition brief that the line between commercial and non-commercial speech is not clear.
Because the law remains unclear on brand publishing specifically, lawyers are using other, adjacent cases for clues on how this might shake out. For example, last week, the National Advertising Division issued a ruling on a case involving a dietary supplement brand, Revenue by Science. The company funded editorial-style websites that promoted the brand’s wellness products, but did not clearly disclose that the sites had a “commercial relationship” with the brand. The NAD found during its examination that the content “crossed over” into advertising, and therefore lacked the necessary disclosure. (The NAD only steps into cases where it can ascertain that the activity does qualify as advertising.) Notably, according to a brief covering the case by Davis Wright Tremaine, “the advertiser agreed to either drop its affiliate relationships or require those affiliates to change their disclosures.”
Experts say the biggest question from a legal perspective is whether it’s clear enough when a brand is paying for content to be produced, and if the content is heavy on the promotional aspect. “There’s no problem if a company has a writer who writes editorial pieces on a blog, and also promotes that brand’s product,” said Freund. “But how is it presented? As an independent piece that’s not connected to a brand?” In cases like this, factors such as separate URLs can come into play, for example, said Freund.
There are some signs of attempts at regulation, although it’s patchy. Last June, the U.K.’s ad standards body released a statement that said that editorial content is protected to some extent in a way advertising is not. The statement, which specifically covered gambling communications, said that content marketing that doesn’t directly have product references or calls to action is protected in the same way editorial content is. In the U.S., the FTC has come down hard on brands that create sites that look like independent review websites, but are owned by brands.
To be clear, brands have produced content flattering to their interests for decades, and the concept of branded content isn’t exactly new or novel. What is perhaps new to some, is that more brands are using words like “journalism” or “objectivity” to describe what they do.
At this point in its evolution, rules governing brand publishing are few and far between. In many cases publishing operations are run by marketing departments, but the content published by brands and the publications they own operates on a spectrum of objectivity and independence.
For Raju Narisetti, global head of publishing at McKinsey, the issue touches on a wider one of news literacy. Speaking on an episode of the Brand Publishing Show, Narisetti said he believes that audiences are smart enough to be able to discern who is producing the information and content they read, and therefore are able to discern any built-in biases and POVs. “The logic that if people have more choices, then they clearly can compare and contrast. And then they’re smarter for it, rather than having only one or two choices,” he said.