Government investigating hidden branded content after Starcom Mediavest given slap on the wrist
The government is investigating how marketers signpost paid-for content on blogs and websites after finding that Starcom Mediavest and TAN Media had arranged for endorsements in online articles and blogs on behalf of MyJar, a short-term loan provider, without making it clear it was advertising.
Starcom Mediavest, TAN Media and MyJar have since promised to ensure all advertising and marketing in articles and blogs are clearly labelled and are now “engaged constructively” with the Competition and Markets Authority (CMA) during its investigation.
However, a number of other agencies and brands have been flagged for similar practices. The CMA has written to around 13 marketing companies, 20 businesses and 33 publishers to warn them that by not making paid-for content clearly distinguishable from the opinion of a journalist or blogger they may be breaking the law.
The CMA now plans to publish open letters on its website so that all businesses, marketing companies and publishers are able to look at the steps they need to take to comply with consumer protection law.
Nisha Arora, CMA senior director, consumer, said: “Opinions in blogs and other online articles can influence people’s shopping decisions. Failing to identify advertising and other marketing, so that it appears to be the opinion of a journalist or blogger, is unlawful and unacceptable.
“The businesses being promoted, the marketing companies arranging promotions and publishers of online articles all need to play their role and maintain trust online by ensuring that advertising and other marketing is clearly distinguishable from editorial content and that this is not hidden from the consumer.”
It comes after a wider crackdown by the CMA into fake online reviews, which none of the companies named above have been linked with.
In February, the CMA pushed five online review sites to agree to improve their practices while a month later, it took action against a marketing firm that had written over 800 fake positive reviews over the past two years for 86 small businesses that were published across 26 different websites.
“We understand that these are important channels for businesses seeking to promote products and services – but they need to do so in a way that complies with consumer protection law,” added Arora.
In reponse to the investigation, a spokesperson for Starcom Mediavest said:
“This was an historical incident and we have worked with the CMA to ensure that all advertising is clearly distinguishable from editorial content. We take our obligations to the consumer very seriously and have worked hard to ensure our practice fulfils on this.”
TAN Media and MyJar had not returned The Drum's request for comment at the time of writing.