Natural (Native) Advertising Is Now Also Under Control

Today, when everyone is already tired of ubiquitous advertising, it is extremely difficult to get users' attention. However, marketers do not despair and are looking for ways to create less intrusive advertising messages. One such solution is natural advertising ("native advertising"), which includes sponsored posts on social media and blogs.

However, it seems that the peak of popularity for this type of PR activity is already behind us in the United States. The reason for this is the Federal Trade Commission's guidelines, which encourage the disclosure of paid reviews and recommendations in posts, which undoubtedly undermines their value. Time will tell whether this will lead to a decline in this type of PR activity. In the meantime, we will explore how to play by the new rules and what awaits those who do not want to play by the new rules, as well as analyze whether Russian legislation contains provisions that allow for prosecution for paid posts.

What Are Paid Posts?

People with popular social media accounts often receive offers to advertise clothing or other products by posting a photo of themselves wearing or using the product on their account in exchange for monetary compensation, a discount, or the opportunity to keep the product they received. Additionally, there is a practice of paying a fee to the blogger for each click on a link posted on the blogger's page that leads to the product manufacturer's website.

When posting such a commissioned photo, the blogger typically does not include the word "advertising" in the description or hashtags, and they do not disclose any connection to the product manufacturer or distributor in any other way. Therefore, such a post is perceived as user-generated content, organically woven into the news feed and does not cause rejection among subscribers. This is what marketers are trying to achieve, tired of fighting with the "banner" blindness of users.

So, subscribers who see a photo of their favorite actor wearing a certain company's jumper on his personal blog get the impression that he chooses clothes from this company in his everyday life. This allows you to leave a message in the user's head: "Your favorite actor approves of it". It is not surprising that this practice has become increasingly popular, especially in the world of fashion. While posting photos of celebrities next to a certain brand's drink and praising it might raise suspicion and indicate a paid advertising campaign, posting photos of celebrities wearing a new bag from a well-known fashion house might not alert users as much, leading them to believe that the bag, which has already been "loved" by celebrities, deserves a place in their own wardrobes.

Get Rewarded — Disclose!

Bought posts have attracted the attention of the US Federal Trade Commission, which protects consumer rights and, in particular, monitors compliance with antitrust legislation.

According to the Commission, bought posts published without disclosing information about the blogger and the customer's relationship are unfair advertising practices, as they mislead consumers.

This opinion can be agreed upon: after all, our desire to buy something will be different depending on whether a product is recommended or approved by an independent person or a person who received a reward for it.

Imagine that you are going to go to a restaurant and look for reviews about it on the Internet. Will you take into account a positive review from a person who was paid 1,000 euros by the restaurant? I don't think so. But what if the positive review was left by a well-known restaurant critic who is often invited by restaurants to try their food and write reviews? We will also be cautious about such a post, because even if a restaurant critic does not receive a reward for a review and can, in principle, write a negative review, we understand that in this case, the chef could have tried harder to prepare the dishes, the waiters could have been more courteous, and the service could have been faster, because the restaurant knows that a review will be written.

This raises many questions. Should a blogger disclose their connection to a manufacturer if they receive a product as a gift, but they genuinely like it and recommend it? And what if he has already revealed the ordered nature of the photo in the T-shirt sent by the manufacturer, but a couple of months later posts a photo with his beloved grandmother in the dacha, where he is also wearing this T-shirt, but now because he really wears it in everyday life?

The uncertainty of when and how to report your connection with the manufacturer or distributor of the product makes many bloggers violators. In order to eliminate such uncertainty and clarify its position on this issue, the Commission has issued guidelines that are not legally binding, but provide guidance on what the Commission considers to be unfair advertising practices and, consequently, what actions may result in legal consequences.

The main provisions of the Commission's guidelines are as follows:

1. Information about the relationship between the blogger and the post's sponsor must be disclosed if the blogger receives compensation. The form of compensation is irrelevant: this can be a monetary reward, a free trip, a discount, a bonus card, the opportunity to appear in a future advertisement for this brand, and so on. In case of doubt, the Commission suggests asking the following question: Would knowing the reward for the post change the user's perception of the recommendation? If the answer is yes, then disclosure is necessary.
2. Posting a post or photo is already considered an endorsement. The post does not have to contain a praising comment to be considered an endorsement or recommendation. In most cases, posting a photo of a product or a photo with a product will already be perceived as approval.
3. The connection between the blogger and the manufacturer is not publicly known. Even if the blogger is a "face of the company" or an employee of the company whose products they are praising, information about their connection to the company is often unknown to a significant portion of their followers (according to the Commission, 15% is already a significant portion) and to people who have only seen one of the blogger's posts, so disclosure should be made every time a product is advertised. Leaving a general remark in the "About Me" section, such as "Most of the products mentioned in my blog are sent to me as gifts by the manufacturers," will also not be sufficient.
4. The disclosure should be clear and visible to users. If the post's description includes a remark like "Company X sent me this product as a gift to test it, and I really liked it", the Commission believes that this would be sufficient disclosure. However, in the case of a video review, it is better to mention the promotional nature of the review directly in the video rather than in the description. Outsmarting the Commission by making the disclosure in small print, color that merges with the background, or hiding the hashtag #ad among thirty other hashtags will not work — this disclosure will not be recognized as understandable and noticeable.
5. The 140-character limit on Twitter is no excuse! For networks like Instagram or Twitter, where the possibility of lengthy comments is limited, the Commission suggests doing the following: write "Sponsored" or "Promotion" or "Paid ad". Descriptions can start with "Ad" or #ad, because this is a widespread abbreviation for Advertisement. The initial hashtag #sp, as an abbreviation for Sponsored, will not be properly disclosed, because the user will not always understand that "sp" is an abbreviation for Sponsored, and not, for example, from sport, spoon, space, Spiderman.

Compliance with these simple rules will protect bloggers from the disgrace of the Federal Trade Commission, which may result in the withdrawal of all funds received by the blogger for the conducted advertising campaign. The customer may also be held liable for unfair advertising.

For example, the Commission recently found misleading an advertising campaign conducted by Lord&Taylor in support of a new collection. So, Lord&Taylor ordered photos in a dress from the new collection to popular fashion bloggers, having previously sent them dresses as a gift and paid for photos in them. No post contained information about the ordered nature of the photos, which became a reason for concern of the Commission.

It is important to note that not only American customers and bloggers may potentially be under the Commission's special attention, but also Russian bloggers who "direct" their activities to the United States, for example, by using English, posting during peak hours in the United States, and so on.

The Russian Perspective

The Federal Antimonopoly Service of Russia, which monitors compliance with advertising laws, and the Federal Service for Supervision of Consumer Rights Protection and Human Welfare (Rospotrebnadzor), which protects consumer rights, have not expressed the same concerns about natural advertising as the US Federal Trade Commission. However, this does not mean that there is no risk of being held accountable in Russia.

Federal Law No. 38-FZ on Advertising contains a general prohibition on unfair and false advertising.

Thus, paid posts published without disclosing the connection with the client may be considered as unfair competition by misleading (Article 14.2 of the Federal Law "On Protection of Competition" No. 135-FZ), and therefore be recognized as unfair advertising (paragraph 4 of part 2 of Article 5 of the Federal Law "On Advertising"). In this case, the advertiser will be held responsible (part 6 of Article 38 of the Federal Law "On Advertising").

Alternatively, it is possible to qualify paid posts as false advertising that contains information that is not true about the recommendations of individuals or legal entities regarding the object of advertising or about its approval by individuals or legal entities (paragraph 10 of part 3 of Article 5 of the Federal Law "On Advertising"). In this case, the advertiser will also be responsible.

In addition, the Law "On Advertising" prohibits the dissemination of hidden advertising, which is advertising that has an unconscious effect on the minds of consumers. The question of whether paid posts can be considered to be advertising that has an impact that is not perceived by consumers of advertising is certainly debatable. However, it seems that it is possible to interpret hidden advertising in such a way that it encompasses paid posts.

As can be seen, Russian legislation already contains norms that are potentially applicable to paid posts. When the issue of natural advertising is given more attention by regulatory bodies, legislation is likely to be supplemented with more specific norms. For example, it can be predicted that the obligation to disclose the advertising nature of posts will be directly fixed in the law "On Advertising", as it is done, for example, for periodicals that do not specialize in advertising messages and materials (Article 16). In addition, changes may be made to Article 10.2 of the Federal Law "On Information, Information Technologies and Information Protection" No. 149-FZ as an addition to the existing duties of bloggers. It is also possible in the future to reinforce this responsibility with the responsibility of the bloggers themselves.

It is noteworthy that some Russian celebrities, driven not by fear of legal consequences, but apparently by respect for themselves and their followers, voluntarily disclose their connection to the manufacturer of the products they advertise.

We hope that this practice will become a good tradition, and that the norms of Russian legislation will allow us to effectively combat misleading paid posts.