A 'Faustian Pact'?: Native Advertising and the Future of the Press

74 Pages Posted: 18 Mar 2015

See all articles by Lili Levi

Lili Levi

University of Miami - School of Law

Date Written: February 27, 2015

Abstract

As technology undermines the economic model supporting the traditional press, news organizations are succumbing to the siren call of “native advertising” – a new marketing technique for unobtrusively integrating paid advertising into editorial content. Brands are increasingly turning to native ads to preempt consumers’ well-documented ad avoidance. Although the native advertising model debuted on digital native news sites, it is now ubiquitous in elite legacy media as well. Everyone knew “native” had “arrived for good” when the venerable New York Times not only introduced its online “Paid Post,” but incorporated sponsored content in its print editions, and even hired an in-house branded content production team to conceive and execute the embedded ads on behalf of advertisers. Because such integrated advertising must inevitably flirt with disguise and deception, administrative and scholarly attention has principally addressed it through a consumer protection lens. Yet this conventional frame ignores the more insidious hazards of this transformational development. Apart from confusing at least some consumers, the turn to native ads will profoundly hobble the press in the exercise of its democratic role and will invite recalibration of its privileged constitutional status. These effects are particularly troubling in an age when increases in global state power and new forms of censorship most call for a powerful, independent and fearless press. Still, since native advertising is here to stay, admittedly imperfect responses must be explored. In that spirit, this Article proposes three solutions: 1) designing sponsorship disclosure at the per-ad level in close alignment with results of rigorous empirical research regarding consumers’ cognitive and perceptual responses to labeling; 2) adopting an additional new approach to corporate-level disclosure – highlighting advertiser identity and spending – in order to aid public oversight over the editorial independence of news organizations; and 3) addressing structural impediments to collective action by news organizations in order to promote collective strategies for effective self-regulation in the deployment of native advertising.

Keywords: First Amendment, FTC, FCC, sponsorship disclosure, advertising, stealth marketing, deception, consumer confusion, press, journalism, editorial independence, collective self-regulation

Suggested Citation

Levi, Lili, A 'Faustian Pact'?: Native Advertising and the Future of the Press (February 27, 2015). Available at SSRN: https://ssrn.com/abstract=2579341 or http://dx.doi.org/10.2139/ssrn.2579341

Lili Levi (Contact Author)

University of Miami - School of Law ( email )

P.O. Box 248087
Coral Gables, FL 33146
United States

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