Ad or Editorial? Considering Content Marketing’s Legal Implications

Websites have banner ads, media sites feature native advertising and search engines promote paid content above search results. Due to the sheer volume of these ads, they are often ignored — or in some cases blocked — by consumers. It’s no surprise marketers are exploring new ways to engage consumers and promote their brands.

Enter content marketing. By taking a more informative and less persuasive approach, content marketing is building a more authentic relationship between some brands and their customers.

The First Amendment & Content Marketing
Although content marketing may look and feel like traditional editorial content, it hovers between commercial and noncommercial speech. Why does it matter? Simply put: The First Amendment provides greater protection for noncommercial speech. Most noncommercial forms of speech, such as individual opinion, are practically immune from state regulation. So, in some ways, the closer content marketing leans toward its editorial heritage, the better shielded the content creator may be from the regulatory arm of the state.

The First Amendment exists to protect an uninhibited exchange of ideas and to further individual rights of self-expression. It covers everything from the written word to paintings. Even commercial speech, which does nothing more than promote a commercial transaction, is entitled to a limited amount of First Amendment protection. According to the U.S. Supreme Court, society possesses a keen interest in the free flow of commercial information and benefits from its availability. But states in particular want to suppress commercial messages that are false or promote illegal activity.

The Source of the Information
Concerns of false or deceptive information often focus on the content of the commercial message — did the company say it was green when it wasn’t truly? With content marketing, however, the focus shifts to the publisher or creator of the message. Consumers are naturally more skeptical of commercial speech because the risk arises that, even though there is a clear motive behind these messages, consumers may be deceived.

Since content marketing looks less like a traditional ad and more like editorial content, consumers won’t necessarily be fooled by the content of the message but by the implication that the speaker is independent and the content is therefore more credible. Exploiting this mistaken belief may trigger claims of false advertising — even if the content itself is otherwise truthful.

Copyright Infringement or Expert Interview?
LasikPlus employed a freelance writer to create editorial content. The writer took a journalistic, noncommercial approach to the article — consulting print, online and in-person sources for information. One in-person source was a professor of ophthalmology at a major university. One of the professor’s quotes, plus the name of his employer, appeared in the final article, which was then published on LasikPlus’s website.

Writers regularly interview subject matter experts — firsthand or through public record — when creating editorial content. They mention the expert’s title and workplace to establish his credibility. This is common practice among journalists. While the content appeared on LasikPlus’s website, it did not include any commercial messaging — the name LasikPlus never even appeared in the story — and therefore the article was noncommercial speech.

Yet shortly after the article was published, the professor’s university contacted LasikPlus. The university claimed LasikPlus was using its copyrighted name for promotional purposes and asked that the reference be removed. Since the professor’s quote wasn’t essential to the story, LasikPlus deleted the reference in question to avoid needless litigation. However, LasikPlus was legally within its rights to cite the professor and name his employer — as any other journalist would do.

If a writer is going to be governed by the commercial messaging that surrounds the noncommercial content on a website, this precedent would effect the entire media industry.

Stewart v. Rolling Stone
How does the court define a commercial speaker? A commercial speaker has a direct business interest in the goods that are the subject of the content. In a 2010 California Court of Appeals case, Stewart v. Rolling Stone, several rock bands sued the magazine for using their names in a multi-page, foldout feature that blended in ads for Camel cigarettes. The musicians claimed that Rolling Stone inserted their names in the feature near the cigarette ads without their permission to bolster cigarette sales.

In evaluating the commercial nature of the speech, the court determined that, although the magazine was engaged in commerce, it was not the producer, distributor or seller of cigarettes. The magazine was not the “creator” of the commercial message. It was simply the medium through which commercial messages were delivered, akin to the newspaper selling ad space. Plus, the magazine wasn’t referenced in the body of the ad or in the editorial feature. For these reasons the court held that the objectionable speech was not commercial but was instead editorial — noncommercial speech worthy of heightened First Amendment protections.

Kasky v. Nike
By contrast, in an earlier California case, Kasky v. Nike, Nike responded to a media campaign drawing attention to its labor practices by issuing a variety of prepared statements: some made to journalists, others published as press releases and others sent as letters to universities. The statements defended Nike’s labor policies and disclaimed Nike’s role in any improper labor practices.

When these statements came under fire for their accuracy, Nike defended its position by arguing that its speech was political — given its discussion of labor policies — and the statements did not appear in conventional advertising formats or venues. The court wasn’t persuaded. It held that the statements were commercial speech: Nike was a commercial speaker, selling Nike products to an audience likely to purchase such products, so the speech received less protection under the First Amendment.

FTC Guidelines in a Social Media Context
While courts have managed to adapt traditional law to address content marketing, the Federal Trade Commission has issued guidance intended to address the changing marketing landscape. In 2009, the FTC issued a publication called “Guides Concerning the Use of Endorsements and Testimonials in Advertising.” In the guide, the FTC stresses that a “material connection” between advertisers and endorsers must be disclosed when the relationship “is not otherwise apparent from the context of the communication that contains the endorsement.”

The goal of the guide is to ensure that endorsements are transparent — including those made via social media platforms. According to the FTC guide, if the person tweeting or blogging about a positive experience at a store or with a product or service is getting paid, this obviously impacts the credibility of the write-up. Consumers are entitled to all of the facts, including any information that might call into question the statement’s sincerity.

“When a brand becomes a publisher, it needs to be more than just a play on words.” 

Trained, Truthful & Transparent
In order to deal with these new marketing realities, brands and their agencies should be:

  • Trained in the full scope of content marketing, including any potential legal implications;
  • Truthful in the content of the speech;
  • Transparent in the connection between advertiser and endorser.

The courts have made great strides in determining how the law affects content marketing. But it’s still a hot topic open for plenty of change and conversation.

Needless to say, when a brand becomes a publisher, it needs to be more than just a play on words. Brands should have a truly editorial focus. This approach and other, more specific, steps can be taken to ensure a brand’s published content is considered noncommercial speech. It also requires the brand to understand a new scope of legal implications by which the media abide.

Amanda Penick contributed to this article. She also practices law at Graydon Head, the oldest general practice law firm in Cincinnati. She specializes in real estate and corporate law.

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David Germano
David Germano

David is the VP of Content Marketing for Empower Media Marketing, and runs Empower's Content Marketing division, Magnetic Content Studios. For more than 14 years, David has been helping brands develop sustained content marketing strategies and operate like media to build their own audiences. David is often speaking on the topic, and is a guest contributor to Content Marketing Institute.