Stealth Marketing and Editorial Integrity

Abstract:     
"Stealth Marketing and Editorial Integrity" is the first article in the legal literature to address the normative implications of covert marketing in mass media. For business, technological, and cultural reasons, advertisers and propagandists are increasingly using editors to pass off promotional messages as editorial content. This integration of sponsorship allows marketers to cut through communications clutter and audience resistance to marketing. In this way, the practices of payola, product placement, and sponsored journalism are proliferating and spreading into newer media forms like blogs and video games. A federal sponsorship disclosure law has proscribed these practices in broadcasting for nearly a century. Despite high profile recent controversies about the practices, the legal literature is devoid of any systematic analysis of the problem that stealth marketing presents or the values that sponsorship disclosure might serve whether in broadcasting or other media.

This Article fills that void by providing a normative theory of sponsorship disclosure law informed by the First Amendment, bribery law, and information theory more generally. Drawing on the economic theory of Ronald Coase and the social theory of Juergen Habermas, Professor Goodman identifies the harm of undisclosed sponsorship in media as a degradation of the robust public discourse that is necessary to a democracy and is possible even in a highly commercialized media sphere. The Article concludes with a proposal for revamping and extending sponsorship disclosure law beyond broadcasting in a manner that is technology neutral and sensitive to the evolution of digital technologies.

Keywords: marketing, advertising, media, disclosure, intellectual property, payola, propaganda, advertising, commercial speech, First Amendment, Coase, Habermas

JEL Classifications: K29, M30, M37, M39

Accepted Paper Series