Advertising Watchdog Concerned About Native Advertising

Concludes Inquiry Into a Qualcomm Article Series on Mashable

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The National Advertising Division's first official look into sponsored content determined that an article series running on Mashable earlier this year was appropriately identified, the group said Monday.

Qualcomm paid for an article series on Mashable.
Qualcomm paid for an article series on Mashable.

An NAD spokeswoman said the months-long examination into a campaign from Qualcomm for its Snapdragon processor chip was part of the group's routine monitoring program. The NAD is the marketing industry's self-regulatory body, backed by agencies and marketers.

The campaign had come to the NAD's attention after Mashable removed the "sponsored by" label that ran with a 20-article series Snapdragon had sponsored. The removal is what prompted the NAD's examination of the campaign, according to Laura Brett, staff attorney at NAD.

But, she added, the NAD is generally concerned about native advertising.

"These are issues of concern for us," Ms. Brett said. "We want to make sure the industry is doing what it's supposed to."

The NAD's inquiry comes as the Federal Trade Commission prepares for a hearing in December on sponsored content, a category projected to attract nearly $1.9 billion in spending this year. The FTC is seeking clarity on the advertising strategy, which doesn't have clear guidelines. Labeling across sites is inconsistent and sponsored content can mean different things to different publishers and readers.

The Mashable series, called "What's Inside?", looked at the technologies that power various products, from electric guitars to the Large Hadron Collider. Banner ads for Snapdragon, which is used in cell phones and tablets, ran adjacent to the stories, which also carried a tag indicating the company sponsored the articles.

A New York Times article on the campaign that ran in April caught the NAD's attention, Ms. Brett said. Later, NAD officials noticed the series had dropped its sponsored label.

"We sent a letter to Qualcomm to ask why," she said. Qualcomm, she added, was cooperative. (Qualcomm did not immediately respond to an Ad Age email and phone call on Monday afternoon.)

"We've been interested in the native advertising category for some time," Ms. Brett said. "The NAD has been watching this conversation unfold and it looked like a good opportunity to explore how native advertising is evolving. That is the genesis of the case."

Adam Ostrow, Mashable's chief strategy officer, said the sponsored-content series was initiated by a request for proposals from Qualcomm. The site pitched the company on the series, which Mr. Ostrow said falls squarely within the topics it covers regularly. Qualcomm agreed to the article series, which Mashable's editorial team then produced.

Qualcomm did not influence the content of the articles, Mr. Ostrow added. The NAD pointed out that none of the articles addressed mobile phones or devices that contained Snapdragon components.

The NAD, which is administered by the Better Business Bureau, said in a press release that Qualcomm's sponsorship was "more akin to an advertisement that ran alongside an article for a period of time, rather than content written to further an advertiser's commercial end."

When banner ads run in conjunction with the content, the NAD continued, it is appropriate for the "sponsored" label. However, once the campaign expires, Mashable no longer needs to include the label because the site would normally produce that type of content, the NAD said.

Mr. Ostrow said the NAD notified Mashable's ad department after the investigation was complete.

The NAD conducts about 150 investigations a year, a spokeswoman said. Some are competitive challenges, when a marketer protests the claims made in a competitor's advertisement. Others, like the Snapdragon series, are part of the NAD's monitoring program. NAD has conducted inquiries into online content where the distinction between editorial and advertising is blurred, the spokeswoman said. It has also looked at advertorials in print.

"We can look for types of advertising that competitors are not yet challenging but that guidance in the industry would be important," a spokeswoman said of the monitoring program.

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