Product placement labeled news attracts NAD's condemnation

American Media, Inc. (Shape Water Boosters), NAD Case #5665 (Dec. 18, 2013)

NAD brought this case itself.  NYT article on the case, of note given the NYT’s own foray into “native advertising.”  An article in Shape magazine, and on its website, bore the caption “News,” discussed the importance of staying hydrated and recommended SHAPE Water Boosters as an aid to staying hydrated: “The obvious solution is to stick with water, but about 20 percent of Americans reportedly don’t like the taste. If that sounds like you, check out the new SHAPE Water Boosters … Just a single squeeze … adds delicious flavor – but not calories – along with a concentrated punch of nutrients that offer some important bonus benefits.”

NAD “was concerned that consumers may give more credence to the advertiser’s objective claims about the product’s attributes because of the context in which the claims appeared.” Unlike a standard product placement, the ad made specific, objective benefit claims for the product.  Shape argued that the connection between the content and the magazine was obvious to consumers. NAD didn’t disagree.  But NAD was concerned that the article was “formatted and titled and appeared to be a news article” but promoted the SHAPE products as part of the news.  “Although consumers reading SHAPE magazine may be aware that SHAPE Water Boosters are related to SHAPE magazine, those same consumers can reasonably attach different weight to recommendations made in an editorial context than recommendations made in an advertising context. Put another way, consumers may reasonably believe that editorial recommendations in SHAPE magazine are independent of the influence of a sponsoring advertiser.”

NAD rejected Shape’s argument that an editor’s note on page 32 sufficiently alerted consumers that the article was an ad.  “[E]ffective disclosures must be in close proximity to the main claim, meaning that they can be read at the same time a consumer reviews the claim.” Though readers may have become accustomed to the informational/endorsement format, they “generally attach different significance to recommendations made in an editorial news article than they would if the same recommendations were made in an advertising format.” NAD recommended a clear and conspicuous “advertising” designation.