According to our friends over at Women's Wear Daily, fellow fashion industry-insider publication The Daily Front Row has been operating outside of the scope of ethical advertising. WWD, which just announced today that it will be cutting its daily print publications in favor of a weekly schedule, says that The Daily Front Row, the free print publication headed up by editor in chief Brandusa Niro, has been raking in advertising dollars (think: between $5,000 and $8,000 per ad) by promising advertisers coverage on the editorial side. The problem is: the NYC-based publication (which also runs a fully functional website in additional to its print publication), continually fails to mark such coverage as sponsored content. While WWD notes that the line between editorial and advertising at many fashion publications is often quite a bit blurred, with "the exchange between publishers over buying ads sometimes including a nudge for editorial coverage," the Daily has taken it a step too far with its blatantly unethical approach to securing advertisers. So, what really is wrong here … legally?
Well, aside from what appears to be bribing of advertisers (namely, WWD says the DFR’s reporters will write favorable stories about a brand if that brand purchases advertisements in the paper), if the reports are true, The Daily Front Rowis failing to abide by the Federal Trade Commission (FTC)’s guidelines in connection with sponsored content. These guidelines and publications' application of them has been a hot topic for the FTC over the past couple of years, in particular. In a sponsored content-specific conference in 2013, a representative for the FTC stated: “Increasingly, advertisements that more closely resemble the content in which they are embedded are replacing banner advertisements on publishers’ websites and mobile applications." So, it seems as though The Daily Front Row's questionable tactics are among the things the FTC wants to tackle.
The FTC, a Washington, DC-based regulatory entity, has the authority to bring charges against companies that deceive consumers and as of a few years ago, it issued non-binding guidelines on the use of the sponsored content ads. (The entire point of the FTC's "clear and conspicuous" disclosure rules is to ensure consumers recognize content as sponsored before engaging with it so that they can make an informed decision to read, watch or listen to the brand-sponsored media). According to these guidelines, advertisers and advertising sites may be liable for failure to disclose material connections (think: payments or in this case ad dollars in exchange for editorial content) that they share. The Guidelines also make it clear that these parties have a duty to disclose their relationships when making endorsements outside the context of traditional ad campaigns (think: sponsored editorial spreads).
The Daily Front Rowhas not issued a statement in response to such allegations, but one thing we do know is that if the FTC were to initiate an action, it wouldn't be cheap. While the FTC's guides, such as the one outlining Sponsored Advertisements, do not have the force and effect of law, that does not mean The Daily Front Row or others are in the clear to violate them. If a person or company fails to comply with a guide, the FTC has the ability to bring an enforcement action alleging an unfair or deceptive practice in violation of the FTC Act. For instance, in 2011, the FTC charged Nashville, Tennessee-based Legacy Learning Systems with $250,000 in settlement damages, making it the first ever monetary component for a violation of the blogger endorsement rules.
More to come (maybe). But in the meantime, to avoid complications and potential fines, disclose any material connections. AND make your disclosures “clear and conspicuous.” The FTC suggests using “#Ad”, “Ad:” or “Sponsored” in tweets to be clear that a tweet or link within a tweet includes compensated content, and placing clear disclosures near the beginning of blog posts or videos, in this case, as well.