Key principles of ad disclosure

What are the rules around disclosure of marketing communications?

The background

Over the past few years, there have been a number of challenges to advertising communications on the basis that they are not "obviously identifiable".  The three areas that have attracted particular regulatory attention in this context are:

• traditional media (newspapers, magazines etc) – in the context of whether advertorial content is clearly recognisable as a marketing communication, rather than being confused with pure editorial content;

• bloggers/vloggers – for failing to disclose the existence or extent of the commercial relationship they have with brands whose products they have endorsed or featured on their channels; and

• affiliate marketing – for failing to ensure that additional disclosure is present when the affiliate content is not obviously identifiable as a marketing communication (eg performance-based marketing where an affiliate is rewarded by a business for new customers attracted by the affiliate's marketing efforts, whether by news outlets, blogger/vloggers or commercial websites such as voucher sites). 

Consequently, there have been a number of rulings on the adequacy of particular labels to identify advertising materials.  The following are some of the key principles derived from rulings and various CAP help/guidance notes. 

Ad disclosure: key principles

• The starting point is whether the marketing communication is already obviously identifiable as an ad.  If it is, no further action is required (see CAP Advice Online – Online Affiliate Marketing);

• If not already clear from the context, an appropriate label should be used to indicate the nature of the relationship to the consumer (see CAP News: Is your ad 'obviously identifiable?' Here’s why 'Spon' is not 'ad');

• Sponsorship and advertising are treated as having different meaning to consumers.  The key distinction is whether any editorial control over content is exercised by the brand (advertising) or whether there is only a payment element with ultimate control remaining with the publisher/vlogger etc (sponsorship) (see Advice Online: Recognising Advertisement features);

• If labelling is required, companies should avoid the use of ambiguous or confusing statements which do not make it clear whether the piece in question is advertising or sponsorship (see CAP Advice Online: Video blog scenarios);

• When labelling is required, it should be placed somewhere consumers will be able to see it before they choose to read, watch, or listen to that content (see CAP News: Is your ad 'obviously identifiable?' Here’s why 'Spon' is not 'ad').

• In the context of affiliate marketing, where only some of the links on the affiliate's website are advertising then it needs to be obvious which links are advertising and which are not (see CAP Advice Online – Online Affiliate Marketing).

Each are discussed in turn below. 

Is the marketing communication obviously identifiable as an advert?

Labelling is only required if the content in question is not already obviously identifiable as an advert.  Even when presented alongside editorial/native content, CAP has acknowledged that "it is feasible that the overall presentation and context could make it sufficiently clear [that a particular piece is a marketing communication]".  In a 2013 adjudication against Haywood & Co (not upheld) the ASA found that the advert (which had featured in a regional newspaper) had been presented in a way that was obvious to readers that the advertorial had been paid for and written by Haywood & Co.  In particular, the ASA noted that the advert had been separated from editorial content by being bordered in a blue box and that "there was nothing in the ad to suggest it had been produced by anyone other than the advertisers". 

If not already clear from the context, appropriate labelling is required

CAP Guidance suggests that this "will particularly be the case where the individual concerned is primarily a creator of non-commercial content or where the overall impression is of editorial independence".  The purpose of the label is to clearly indicate to the consumer that what they are in fact viewing is an advert when the context and presentation alone does not facilitate this. 

'Sponsorship' vs advertising

CAP has sought to clarify the difference between advertising and sponsorship in a series of help notes (see for example, CAP News: Is your ad 'obviously identifiable?' Here’s why 'Spon' is not 'ad' and CAP Advice Online: Video blog scenarios).  Essentially, the position is that when there is a financial arrangement or other incentive with the brand, but the brand has no control or input into the content, then this may be considered (and labelled) "sponsorship".  An example of this cited by CAP includes when a company provides a travel writer with a free holiday, but has no input or control over any resulting article.  In contrast, where a degree of control over the content is exercised by the brand then this is an advert or advertorial, and must be clearly labelled as such. 

CAP Guidance has suggested that the threshold for "editorial control" is usually based on whether or not the brand has final approval of text and visuals.  However, this is not definitive and in 2009 the ASA made a series of rulings against Express Newspapers for publishing seemingly editorial articles alongside pure adverts for a number of companies.  The brands featured were only permitted to see the final copy of the editorial piece in order to correct factual inaccuracies.  Nevertheless, the ASA considered that because the articles were uniquely favourable to the product featured in the accompanying ad, editorial control was still being exercised by the relevant brand and so the whole feature should have been disclosed as an ad (see commentary under heading "Remember that the spirit of the Code applies...").  Additionally, instances where key messaging has been provided by the brand to the publisher, even if the brand was not permitted 'final' editorial approval, has been considered by the ASA to sufficiently meet the threshold for editorial control (Ruling on ASDA Stores Ltd and MGN Ltd, December 2017).  When considering whether there is editorial control by the brand the ASA may look into the parties' rights and obligations under the contract (Ruling on Wahoo Fitness (UK) Ltd, March 2018). 

Whilst pure sponsored material is not covered by the CAP Code, it has been recognised that the CMA would expect disclosure of a commercial relationship with a brand in order to comply with consumer protection legislation (CAP Advice Online: Videoblog scenarios). 

General comment: It appears that the ASA and CAP are keen to ensure that the delineation between advertising and sponsorship is maintained, so that if something is in reality an 'advert' it cannot also be 'sponsored', and labelling it as such is likely to mislead.

Using an appropriate label when not obviously identifiable

If content requires a label to disclose the commercial relationship between the two brands, then the label used must be appropriate.  The ASA has repeatedly upheld complaints against companies and individuals who have incorrectly labelled content, even when the labelling has been clear and prominent – see, for example the Ruling on Michelin Tyre plc and Telegraph Media Group Ltd, December 2015.  This was upheld against the organisations despite the advertorial piece appearing within the 'sponsored' section and the presence of the phrase "in association with Michelin" was prominently included.  The ASA considered that whilst these "may have served to show that a financial arrangement was in place, they were insufficient to identify the content specifically as an ad (as opposed to, for example, material that had been financially sponsored, but over which the creator retained editorial control)". 

Additionally, the ASA has confirmed that labels where the exact nature of the relationship is not entirely clear to the consumer (ie they would be unable to tell if the content was sponsored or advertorial) would likely breach the CAP Code.  Consequently, statements/phrases such as '[brand name] partnership' (Ruling on ASDA Stores Ltd and MGN Ltd, December 2017); ‘brought to you by’, (Ruling on Procter & Gamble, May 2015) ‘in association with’ (Ruling on Michelin Tyre plc and Telegraph Media Group Ltd, December 2015) and ‘thanks to [brand]’ (Ruling on Mondelez UK Ltd, November 2014) have all been ruled as ambiguous and in breach of the Code. 

General comment: Labels such as "advertisement", "advertisement promotion", "advertising feature" and "ad" are normally acceptable, suggesting that anything without "ad" as the prefix is unlikely to be acceptable when the content is found to be advertising. 

Positioning, prominence and timing of the label

If a label is required to indicate that the consumer is in fact viewing an advertisement, the regulator will take into account the presentation, positioning and noticeability of the label itself. 

Labels should be "prominently placed"; for instance, the Ruling on ASDA Stores Ltd and MGN Ltd, December 2017 establishes that a label in small grey font above a much larger article headline will not attract the readers' attention.  Similarly, the ASA has ruled that if a description box featuring the label is not immediately visible (particularly when viewing the site through a tablet, mobile browser or app) it will be insufficient (Ruling on Wahoo Fitness (UK) Ltd, March 2018).  On the other hand, the ASA found that a banner at the top of the relevant page stating "the page that you are currently reading is an ad feature” to be sufficient given the prominence of the positioning and the fact that readers were likely to see it before engaging with the ad (Ruling on Marcândi Ltd t/a MadBid, March 2014). 

It must also be clear prior to consumer engagement that the content in question is advertising.  This will be particularly relevant if the relevant advertising content features video and/or sound.  In a ruling against Mondelez, the ASA considered it insufficient for disclosure statements to be made at the end of the video given that the consumer had already engaged with the content before the disclosure was made.  This was therefore not obviously identifiable at the outset, and would deprive the consumer of the opportunity to decide whether or not to engage with the advert in question. 

General comment: It seems that best practice for compliance purposes is to place disclaimers prominently at the top of the ad, or above/next to the links to the relevant article, and/or before the consumer engages with any audio/video content. 

If only some links on a website are advertising, they need to be clearly identifiable

Where there is an affiliate marketing relationship on a website and only some of the content or links featured on the website are advertising then this needs to be clear to consumers so that they are able to easily distinguish these from native links/content.  Whilst CAP Guidance states that affiliate marketers are free to highlight this commercial relationship how they would like, it then goes on to suggest that a way of achieving this could include "placing a label, for example ‘Ad’, in or around the title".

Why is this important?

This is currently a very hot topic for regulators who are keen to ensure that there is consistency over how and when advertising is disclosed to consumers.  Indeed, CAP are currently calling for evidence people's understanding of labels and other identifiers that are intended to indicate that online content is advertising.