Regulators and Watchdogs Continue to Focus on Disclosure Obligations

By Vejay G. Lalla and Paavana L. Kumar

As native and influencer content campaigns become more integral to marketers’ consumer engagement efforts, regulators and watchdogs are ratcheting up their enforcement efforts to ensure that consumers understand that they are viewing paid advertising.

For example, the NAD recently determined that where a website page links out to sponsored content (in this case, native video content developed by Joyus and linked to from a PEOPLE Magazine website), the lead-in page must include an appropriate disclosure that consumers see before they click the link – even if, once the videos are actually played, it is clear that they contain advertising content.

In a separate and highly publicized instance, Truth in Advertising published an exposé on the failure of the Kardashian and Jenner families to make appropriate disclosures on over 100 Instagram posts they made in connection with  brand sponsorships. The media attention drove several of the Kardashian and Jenner family members to edit their previous posts to add the disclosure “#ad,” which the FTC has deemed an appropriate disclosure for influencer content.

The FTC has not taken action against any of the Kardashians or Jenners, but it is surely keeping a close eye on this development. Although the FTC’s enforcement actions have historically been directed toward advertisers, rather than influencers, every party involved in native and influencer marketing, including publishers, media and technology companies, will nonetheless need to stay on top of its obligations to ensure it is not the next target.

Vejay G. Lalla is a partner in the Advertising, Marketing & Promotions Practice Group at Davis & Gilbert LLP. He may be reached at 212.468.4975 or vlalla@dglaw.com. Paavana L. Kumar is an associate in the Advertising, Marketing & Promotions Practice Group at Davis & Gilbert LLP. She may be reached at 212.468.4988 or pkumar@dglaw.com.