Branded content regulation – Does money change everything?

Posted By Alan Boyce on 15th May 2017

I was watching an episode of Family Guy the other night. It was the one where Peter Griffin wins a fantasy weekend for two with the Boston Red Sox. When news of this gets out various friends appear at his door, offering various unsolicited gifts which they hope will make Peter decide to take them along with him.

The punchline comes after Quagmire and Joe Swanson have made their offers, when Cleveland turns up and says:

“Hi, Peter. You know how you like $40 cash? Well, here’s almost $40 cash.”

I don’t want to be “that guy” who feels the need to explain jokes, but surely the reason this is funny is that it exposes the absurdity of situations where things-that-are-worth money are acceptable while money isn’t? And that made me wonder – what’s the problem with money, when the intention of all three of Peter’s visitors to influence his decision and the means chosen to do so are basically the same?

This is a big issue in online marketing, particularly as the convergence of media channels continues. It is customary to represent these channels by means of a Venn diagram. Some people show four channels – with Social as the fourth – but I prefer the tripartite split between Owned, Earned and Paid Media…

…not least because it allows me to stick to the default colours in PowerPoint.

This is probably the most comprehensive delineation of these concepts I have come across. It’s by Dave Chaffey, but it’s five years old. Here’s a more recent one from HubSpot, which differs in details but not in fundamentals. If a taxonomy can more or less hold itself together for five years in online marketing, it’s probably achieved some kind of consensus – meaning I don’t have to repeat the reasoning myself. I feel comfortable just saying:

  • Owned Media – Coverage on properties and environments you own or control
  • Earned Media – Coverage on someone else’s properties that you haven’t paid for
  • Paid Media – Coverage on someone else’s properties that you have paid for, ie advertising

Where this gets interesting and controversial is in the crossover areas – especially those that cross over with the Paid sector. As The Smiths said “Money Changes Everything”. Well, actually they didn’t say that – it was an instrumental.

When Paid Media is clearly labelled and identifiable as such, nobody minds. If you pick up a copy of Axonn Media’s The Content Marketer, you shouldn’t be surprised to find that it paints a fairly one-sided picture of how awesome we are and what we do. It makes me appear better-looking and cooler than I am in real life.

We hope you find The Content Marketer interesting and useful, but we wrote it and produced it as promotional material and nobody is trying to deny, conceal or otherwise mislead readers on that.

The public accepts adverts for what they are, even if around a fifth of people are using ad blocking software to avoid them online.

But a lot of media outlets depend on ad revenue and so desperately need to try out new methods that bypass ad blockers. And at the same time, there are online objectives that go beyond eyes on ads – places that overt Paid Media cannot reach.

And so the journalistic axiom that Commercial and Editorial content should be kept separate comes under pressure. I don’t mean “editorial” in the sense of text here – Zoella talking about make-up is editorial just as much as your white paper on implementing Apache Hadoop solutions or your Times leader article is.

Let’s take a closer look at the intersecting fields:

What are we talking about here?

Paid/Owned is about paying to get people onto your online properties. So it would cover PPC and the landing pages associated with your ads, promoted social posts, competitions – arguably, the entire field of SEO falls into this segment as it’s all about paying (someone – whether it’s an agency, an in-house expert or whoever) to get greater search visibility.

This is not where most of the hard cases lie, though. Those are in the sectors where Paid intersects with Earned Media. Earned corresponds to Editorial in “old media” terms. There is an unspoken presumption of publisher integrity, that opinions are sincerely held and that information given is accurate. When money changes hands, that integrity – or the perception of it – is threatened.

Regulatory Solutions

In late April, the Branded Content Research Network called on regulators and industry bodies to take action on the encroachment of Paid Media into Earned territory. Their findings fell into two relatively separable areas, which illustrate that the problem is not just about “bad” brands corrupting “good” influencers:

  • On the one hand, brands paying publishers for positive coverage – and neither party wishing to be open about the influence.
  • On the other, clickbait and “fake news” – where the monetary rewards for generating high traffic volumes from programmatic advertising can lead to the veracity of the content published being subordinated to its clickability.

The second issue is getting its fair share of attention and so I’m drawing your attention to it simply to put it to one side. I want to look at the first problem.

In the world of SEO, the situation is fairly cut-and-dried:

  • Google says thou shalt not pay for follow links
  • If thou doest it anyway and Google catchest thou at it, both link buyer and link seller may be penalised
  • Google can act as judge, jury and executioner in this regard with impunity because it owns the economy in which follow links are an important currency – that is, SERPs

Having said that, although the guidance is clear enforcement is patchy. Almost anyone who has run a website for more than five years will have either paid for a link at some point or had an organic backlink from someone who took money for a link from somebody else – and so could be vulnerable to Silicon Valley Nemesis at any time.

Unless they pay someone to clean up their backlink profile, of course. Which strikes me as somewhat ironic.

In the world of consumer protection, however, things are a little messier. Schedule 1 to the Consumer Protection from Unfair Trading Regulations 2008 (as amended) is pretty unambiguous. It names as a practice that is prima facie unfair:

Using editorial content in the media to promote a product where a trader has paid for the promotion without making that clear in the content or by images or sounds clearly identifiable by the consumer (advertorial).

If you’ve paid for the coverage, it must be labelled as such – or the Regulations prescribe criminal penalties. The difficulty lies, of course, in interpreting the words “paid for”…

This diagram, published by the Internet Advertising Bureau in Content and Native Disclosure Guidance from September 2015, shows what kinds of marketing communications are subject to what kinds of regulation.

The IAB’s guidance explains that the Advertising Standards Authority’s UK Code of Non-Broadcast Advertising and Direct and Promotional Marketing – abbreviated to “the CAP Code” – covers two of the big grey areas:

  • Situations where the brand/advertiser has editorial control over content published by the publisher/influencer (called “advertorial”)
  • Situations where the advertiser/brand and publisher/influencer share editorial control (called “ad feature” or “sponsored content”)

The Code provides for complaints to be made, investigated and judged – with transgressors being named and shamed in published rulings.

What’s not covered by the CAP Code is any situation where the advertiser/brand has no editorial control over the finished content, however much they may have been involved in commissioning it or otherwise enabling the publisher to produce it. The IAB guidance alludes to the problem here by saying that this is sometimes called “sponsored content” as well. Awkward.

So, if a brand pays a blogger to write about its product or its campaign or its research – or a blogger insists on being paid to write about it – the regulatory framework that applies depends on who has editorial sign-off.

Offers You Can’t Refuse

That there is a loophole here you could trap an elephant in should be clearly apparent.

When Don Corleone tells his nephew he will make sure he gets a movie part by making studio head Jack Woltz “an offer he can’t refuse”, the request for special treatment comes accompanied with a thinly-veiled death threat – in this case, the severed head of his beloved racehorse Khartoum.


Clearly, Woltz could have nevertheless decided not to give Johnny Fontane the part and accepted the consequences. But when he caves in, we would struggle to say he made a free choice. So, did Jack Woltz have editorial control here? Or did Don Corleone?

That’s an extreme example, and not one I would recommend online marketers use – even in the most challenging sectors!

The Don had initially attempted to bribe Woltz into giving way, by sending Tom Hagen to negotiate with him – but Woltz refused the Corleone family consiglieri’s incentives because of his hatred for Fontane, who had stolen one of Woltz’s mistresses. The studio boss’s “integrity” withstood the bribes but it crumbled before the threat.

Suppose Woltz had cut a deal with Hagen and had given Fontane the part in exchange for $100,000 (don’t forget, this is set in 1945). Was that a free choice? Did the Corleones buy editorial control of the movie?

OK that’s enough Godfather.

Let’s say I give you £100 to write an article about me on your blog saying I am awesome on the one condition that you tell everyone that I left editorial control up to you and that the money was for research purposes. Suppose you do it and then tell the story we agreed.

How could anyone ever tell if this is “advertorial” or “ad feature” in the IAB’s terms or “supported content” that is not subject to the CAP Code?

Yeah ok – maybe you could infer a pattern from this and other examples taken together. That’s exactly what Google does algorithmically and manually to ferret out suspected link traders. An inference isn’t the same thing as proof, but – for reasons mentioned earlier – Google can shoot first and ask questions later in a way that an impartial legal system can’t.

Suppose I give you £100, ask you to write an article about me and actually do give you editorial control. Unless you slate me in the finished piece, there will always be a question mark hanging over whether you freely chose to say nice things about me or whether you only did it because you were paid to. And the only thing you can call in evidence against that charge is your previous reputation, or what we’ve called “integrity”.

Trust is the Most Important Thing

Going back to the interpretation of the phrase “paid for”, in the Family Guy scenario, we would not hesitate to say that Cleveland is trying to pay for the tickets with his (almost) $40 cash. Quagmire, however, is offering a coffee cake as he was just thinking how much Peter likes coffee cake. It’s not so obvious that everyone would say that’s payment.

Blogtacular asked bloggers what counts as sponsorship, whether reviews are sponsored and what the status of review products sent to bloggers are, and this post shows the range of different answers given and – in turn – what kind of disclosures would be needed.

Ultimately though, it doesn’t matter if cash changed hands or freebies – what matters is where editorial control lies. If the publisher says they weren’t swayed, all the audience has to go on is the publisher’s reputation for integrity. That is, what they disclose and how trustworthy they are.

Do you trust the sources you consume content from? Or do you take things with a pinch of salt?