1. 0
A WORD FROM OUR SPONSORS: The FTC’s Guidelines on “Native Advertising” and
their Affect on Athlete and Celebrity Endorsers
Thomas J. Geddes*
I. INTRODUCTION ……………………………………………………………………1
II. BACKGROUND FACTS AND LEGAL DOCTRINE ……………………………....5
a. Native Advertising Defined
i. Native Advertising Examples
ii. Paid Social Posts by Athletes and Celebrities
b. Regulation and Guidance Thus Far
i. Administrative Interpretation for Endorsements and Testimonials
ii. The IAB “Playbook”
iii. ASME Weighs In
c. The Federal Trade Commission
i. The FTC’s First Attempt to Formulate Guidance
ii. The FTC‘s 2015 Policy Statement
iii. The Lord & Taylor Settlement
III. DISCUSSION……………………………………………………………………….19
a. Industry Response to the FTC’s 2015 Policy Statement
b. Constantly Evolving Issues that the Policy Statement Fails to Capture
i. The Brand Ambassador Dilemma
ii. The “Stock Market” for Professional Athletes
iii. Other Issues Concerning Paid Social Posts
c. Proposed Solutions to the Paid Social Post Problem
IV. CONCLUSION………………………………………………………………………27

2. 1
“The greatest deception men suffer is from their own opinions.” - Leonardo da Vinci
I. INTRODUCTION
Shortly after his team won Super Bowl 50, Denver Broncos Quarterback Peyton Manning
exclaimed in celebration, "I'm going to drink a lot of Budweiser tonight."1
This postgame plug for Anheuser-Busch generated a mountain of media buzz as critics
contemplated whether Manning had been compensated by the beer brand for making the
statement.2
For one, National Football League (NFL) players are prohibited from endorsing
alcoholic beverages, and any such product promotion would likely conflict with rights granted to
the league’s official sponsor.3
While the Budweiser brand has denied involvement in the affair,4
1
Darren Rovell, Budweiser ‘delighted’ but says Peyton Manning not paid to shill for brand after
SB, ESPN (Feb. 8, 2016), http://espn.go.com/nfl/story/_/id/14737625/budweiser-delighted-says-
peyton-manning-not-paid-shill-brand-sb.
2
Patrick Kulp, Peyton Manning flouted NFL rules for his infamous Budweiser marketing,
MASHABLE (Feb. 10, 2016), http://mashable.com/2016/02/10/did-peyton-manning-s-budweiser-
plug-break-the-ftc-s-advertising-rules/#.3SUiljitkqs.
3
E.J. Schultz, How Bud Light’s New NFL Deal Could Change Beer Ads, ADVERTISING AGE
(Nov. 4, 2015), http://adage.com/article/cmo-strategy/bud-light-s-nfl-deal-change-beer-
ads/301214/; Matt Sussman, NFL To Charles Woodson; Only We Can Endorse Alcohol,
DEADSPIN (July 19, 2008), http://deadspin.com/5026974/nfl-to-charles-woodson-only-we-can-
endorse-alcohol.

3. 2
it has derived substantial value from the statement5
and even offered to send a few cases to the
team as a sentiment.6
Manning actually owns two beer distributors in Louisiana, meaning the
move may have been for purposes that were more self-serving.7
But what if the company had paid for Manning’s endorsement? After all, corporations
shell out millions of dollars per year to athletes to promote their products, and the Super Bowl is
a prime time to advertise because so much of the American populace is watching. In 2016 alone,
companies doled out $5M, on average, to CBS for a thirty-second spot during football’s biggest
4
Lisa Weser (@LisaWeser), “Hi Internet. For the record, Budweiser did not pay Peyton
Manning to mention Budweiser tonight. We were surprised and delighted that he did.”, TWITTER
(11:03 PM, Feb. 7, 2016), https://twitter.com/LisaWeser/status/696544870068912128. Weser is
the Chief Marketing Officer for Anheuser-Busch’s Budweiser brand.
5
The statement gave the beer brand nearly $5M in television exposure and $8.8M in subsequent
media coverage (including mentions on social media). See Eben Novy-Williams, Peyton
Manning Just Gave Budweiser $14 Million in Free Ads, BLOOMBERG (Feb 8, 2016),
http://www.bloomberg.com/news/articles/2016-02-08/peyton-manning-just-gave-budweiser-3-2-
million-in-free-ad-time.
6
See Budweiser (@Budweiser), “Congrats to Peyton and the whole @Broncos team. Where
would one ship 50 cases of Bud? Just curious. #ThisBudsForYou #SB50”, TWITTER (10:30 PM,
Feb. 7, 2016), https://twitter.com/Budweiser/status/696536448187527168.
7
Thomas Barrabi, Peyton Manning’s Budweiser Plugs, Explained, FOX BUSINESS (Feb. 8,
2016), http://www.foxbusiness.com/features/2016/02/08/peyton-mannings-budweiser-plugs-
explained.html.

4. 3
game.8
After-game interviews such as this are a normal part of the post-game process, and the
association between beer and sports has become deeply engrained in the consciousness of our
culture.9
If anything, the controversy surrounding Manning’s mention shows us that it is
sometimes difficult, as viewers and consumers, to distinguish the paid endorsement of a product
and material that appears more organically.
Known as “native advertising,” prior scholarship has explored this concepts’ affect on
journalism and free speech,10
focused on Federal Trade Commission (FTC) compliance for
businesses,11
and expressed the need for federal regulation and stricter governmental oversight.12
8
Nick Schwartz, Stunning infographic charts the skyrocketing cost of a Super Bowl ad, USA
TODAY (Feb. 6, 2016), http://ftw.usatoday.com/2016/02/how-much-does-super-bowl-ad-cost.
9
“There is a natural, accepted, and universal link between American beer and sports.”
See Richard Brodsky, Sports’ Culture of Intoxication, SB NATION (Jan. 22, 2013),
http://www.sbnation.com/longform/2013/1/22/3883626/beer-and-sports.
10
See Lili Levi, A "Faustian Pact"? Native Advertising and the Future of the Press, 57 ARIZ. L.
REV. 647 (2015).
11
See Shannon Byrne, The Age of the Human Billboard: Endorsement Disclosures in New
Millennia Media Marketing, 10 J. BUS. & TECH. L. 393 (2015).
12
See A.J. Casale, Going Native: The Rise of Online Native Advertising and A Recommended
Regulatory Approach, 65 CATH. U. L. REV. 129 (2015); Robert A. Gottfried, Six Ways This
Article Is Most Definitely Not an Ad: Deceptive Marketing and the Need for Clearly-Defined
Disclosure Rules in Online Native Advertisement, 27 LOY. CONSUMER L. REV. 399 (2015);
Anthony B. Ponikvar, Ever-Blurred Lines: Why Native Advertising Should Not Be Subject to
Federal Regulation, 93 N.C. L. REV. 1187 (2015).

5. 4
The ascent of this issue has even served as a basis for some to conclude 2016 to be the year that
the FTC begins to bring a bevy of “native advertising” cases.13
Little inquiry, however, has
reflected on how more formalized instruction is set to affect advertisers and those they pay to
endorse their products.
This Comment takes a closer look at the concept of “native advertising,” particularly in
the context of paid social posts by athletes and celebrity endorsers. The Background Facts and
Legal Doctrine section below will examine the brief history behind this budding trend and
outline what regulatory bodies have done to monitor the matter thus far.14
The Background Facts
and Legal Doctrine section will also expound upon the FTC’s role as it pertains to protecting
consumers from deceptive forms of advertising, especially those that appear “native” in nature.15
The Discussion section will then assess the effect that certain statements and decisions have had
on the entertainment industry as a whole, analyze the aftermath of the newly-stated rules, and
argue that the FTC’s guidance to date really only aims to address online content, which — as
evidenced by Manning’s Super Bowl saga — may not be sufficient as the lines between what is
written and what is spoken is becoming increasingly blurred. 16
More, increased enforcement,
although restrictive in nature, stands to provide more opportunities for these types of individuals
13
Jeremy Barr, FTC Spells Out Its Guidelines for Native Ads, ADVERTISING AGE (Dec. 22,
2015), http://adage.com/article/media/federal-trade-commission-releases-native-ad-
guidelines/301921/.
14
See infra Part II.
15
Id.
16
See infra Part III.

6. 5
because advertisers and promoters are more certain of what is and isn’t acceptable in terms of
targeting and engaging consumers.17
The aim of this essay is to add to the existing subset of scholarly work surrounding this
fleeting subject and contribute to a functional framework for this type of “native advertising”
moving forward.
II. BACKGROUND FACTS AND LEGAL DOCTRINE
Before analyzing what still needs to be done, it is imperative to first understand what
“native advertising” is and why it is known to pose a problem for advertisers and consumers.
a. Native Advertising Defined
“Native advertising” is relatively new to the marketing foray. The term first made an
appearance in 201018
and can most simply be described as content that bears a similarity to the
news, feature articles, product reviews, entertainment, and other material that surrounds it
17
Id.
18
According to Google Trends, the first few Google searches for this term occurred in March
2010, and the term first appeared in a newspaper headline in May 2013. Amar C. Bakshi, Why
and How to Regulate Native Advertising in Online News Publications, 4 U. BALT. J. MEDIA L. &
ETHICS 4 (2015),
http://law.ubalt.edu/academics/publications/medialaw/pdfs_only/Vol.%204%20No.%203-4.pdf.

7. 6
online.19
Most advertisers and publishers aspire to deliver paid ads that are cohesive with the
page content, assimilated into the design, and consistent with a platform’s behavior such that the
viewer simply feels that they belong.20
These ads are seamlessly integrated into editorial content,
and thus appear “native” to their digital context.21
“Native advertising” presents an entirely new model to the marketing industry, and
advertisers, publishers, and personalities alike have thrived off of its unclear and nebulous “gray
area[s].”22
Advocates for its use argue that these ads can be interesting, informative, and are
intended to engage others in a fashion that isn’t overbearing,23
while its greatest critics contend
that “native advertisements” are a form of subliminal messaging that “intentionally cause[s]
19
Native Advertising: A Guide for Businesses, FTC (Dec. 2015), https://www.ftc.gov/tips-
advice/business-center/guidance/native-advertising-guide-businesses.
20
IAB, THE NATIVE ADVERTISING PLAYBOOK 3 (2013), http://www.iab.com/wp-
content/uploads/2015/06/IAB-Native-Advertising-Playbook2.pdf (hereinafter “NATIVE
ADVERTISING PLAYBOOK”).
21
Levi, supra note 10, at 649. “Native advertising” has also been described as advertisements
done in a form that mirrors the host platform. See Gottfried, supra note 12, at 401.
22
See Kara Brown, Here’s How Much Celebrities Make in the Instagram Product Placement
Machine, JEZEBEL (Jan. 19, 2016), http://jezebel.com/heres-how-much-celebrities-make-in-the-
instagram-produc-1740632946.
23
Joline Buscemi, The Good and Evil of Native Advertising, HUBSPOT (Mar. 1, 2016),
http://blog.hubspot.com/marketing/good-and-evil-native-advertising.

8. 7
confusion, blurring the line between editorial and [commercial content] with the hopes that the
advertisement becomes a credible source of information rather than, simply, an advertisement.”24
i. Native Advertising Examples
“Native advertising” is not necessarily confined to the digital space, though that is where
it is most prevalent.25
Many online publishers have turned to this method in response to
stagnating display ad revenue in recent years.26
A 2013 survey revealed that 73 percent of online
publishers offer “native advertising” opportunities on their sites and that an additional 17 percent
24
Gottfried, supra note 12, at 401.
25
“Native advertising” also exists in the form of advertorials, sponsored radio shows, and even
infomercials. See Buscemi, supra note 23.
26
Taylor Berman, The Atlantic Is Now Publishing Bizarre, Blatant Scientology Propaganda as
‘Sponsored Content’, Gawker (Jan. 14, 2013), http://gawker.com/5975981/the-atlantic-is-now-
publishing-bizarre-blatant-scientology-propaganda-as-sponsored-content. Atlantic publisher Jay
Lauf has also said, "A lot of people worry about crossing editorial and advertising lines, but I
think it respects readers more ... It’s saying, ‘You know what you’re interested in.’ It’s more
respectful of the reader that way.” Julie Moos, The Atlantic publishes then pulls sponsored
content from Church of Scientology, POYNTER (Jan. 15, 2013), http://www.poynter.org/2013/the-
atlantic-pulls-sponsored-content-from-church-of-scientology/200593/.

9. 8
are considering offering them.27
Similarly, 41 percent of brands and 34 percent of ad agencies
currently use “native advertising,” with many others hoping to do so in the coming years.28
Online-only websites like Buzzfeed and Gawker have thrived in providing “native ad” offerings,
while traditional news publications such as USA Today and the New York Times have struggled
to tow the line between amassing profit and abiding by their rich institutional history and ethical
and journalistic norms.29
“Native ads” range is size and prominence and can be classified into six unique types,
including in-feed ads and promoted listings.30
One of the most notorious examples of “native advertising” appeared on The Atlantic’s
website on January 14, 2013: a “sponsored content” article written by the Church of Scientology
entitled “David Miscavige Leads Scientology to Milestone Year.”31
The piece was stylized as a
news article that chronicled the exponential growth of the religion and characterized its leader as
a humanitarian and visionary.32
The sponsored article also included pictures of churches and a
27
Blurred Lines: Advertising or Content? – An FTC Workshop on Native Advertising, FTC (Dec.
4, 2013), at 7, available at
https://www.ftc.gov/system/files/documents/public_events/171321/final_transcript_1.pdf.
28
Id.
29
Bakshi, supra note 18, at 6–7.
30
NATIVE ADVERTISING PLAYBOOK, supra note 20, at 5.
31
Jim Edwards, Here’s The Scientology ‘Sponsored Content’ Story That The Atlantic Doesn’t
Want You To See, BUSINESS INSIDER (Jan. 15, 2013), http://www.businessinsider.com/heres-the-
scientology-sponsored-content-story-that-the-atlantic-doesnt-want-you-to-see-2013-1.
32
See id. for archived copy.

10. 9
“comments” section that contained primarily pro-Scientology posts. Amidst outcry, the
newspaper took down the sponsored content and temporarily suspended the ad campaign
“pending a review of our policies that govern sponsor content and subsequent comment
threads.”33
The mishap received widespread media attention, and also highlighted the power of
“native advertising” in influencing others and the supposed dangers that come along with it.
Other notable examples of “native ads” include Dunkin’ Donuts’ interactive “Which
Donut Are You?,” Spotify’s “15 Bands That Probably Wouldn’t Exist Without Led Zeppelin,”34
and an article about millennials sponsored by computer company Dell appearing in the New York
Times.35
ii. Paid Social Posts by Athletes and Celebrities
In addition to targeting consumers via artificial articles and sponsored content, companies
pay people with large followings to help promote their brand. And Manning isn’t the only well-
known personality involved with this novel form of “native advertising”: basketball player
LeBron James is the highest-earning athlete in terms of endorsements, while soccer star Cristiano
33
Id.
34
Anders Vinderslev, The top 10 examples of Buzzfeed doing native advertising, NATIVE
ADVERTISING INSTITUTE (Sep. 30, 2015), http://nativeadvertisinginstitute.com/blog/the-top-10-
examples-of-buzzfeed-doing-native-advertising/.
35
Demian Farnworth, 12 Examples of Native Ads (And Why They Work), COPYBLOGGER (Apr.
14, 2014), http://www.copyblogger.com/examples-of-native-ads/.

11. 10
Rinaldo — who boasts over 100 million fans on Facebook36
— can bring in over $300,000 per
tweet, according to Elite Daily.37
Famous figures like Kim Kardashian routinely fetch five
figures for a single tweet,38
and AdWeek reports that celebrities Taylor Swift, Selena Gomez and
Kendall Jenner are worth $230,000 per social media post when the message appears across
Facebook, Instagram and Twitter.39
Lady Gaga “engages … and retweets stuff [fans] say as if
she was one of them,” creating a loyal bond between the two, and this relatableness is attractive
to advertisers.40
A market even exists to measure value and match advertisers with endorsers.41
36
Kurt Badenhausen, Cristiano Ronaldo Heads The Most Popular Athletes on Social Media,
FORBES (Jun. 10, 2015), http://www.forbes.com/sites/kurtbadenhausen/2015/06/10/cristiano-
ronaldo-heads-the-most-popular-athletes-on-social-media/#349b452154cb; see also
https://www.facebook.com/Cristiano.
37
Joseph Milord, These Are The Absurd Amounts Of Money Athletes Get Paid Per Tweet, ELITE
DAILY (Mar. 10, 2015), http://elitedaily.com/sports/athletes-get-paid-to-tweet/961383/.
38
Liat Kornowski, Celebrity Sponsored Tweets: What The Stars Get Paid For Advertising In 140
Characters, HUFFINGTON POST (May 30, 2013),
http://www.huffingtonpost.com/2013/05/30/celebrity-sponsored-tweets_n_3360562.html.
39
Christopher Heine, These 4 Celebrity Influencers Can Charge $230,000 for a Single Brand
Post, ADWEEK (Dec. 4, 2015), http://www.adweek.com/news/technology/these-5-celebrity-
influencers-can-charge-230000-every-time-they-post-brand-168466.
40
Quentin Fottrell, Elon Musk’s $1 billion tweet – and 5 other profitable tweets,
MARKETWATCH (Mar. 31, 2015), http://www.marketwatch.com/story/5-of-the-most-profitable-
tweets-ever-2013-03-25.

12. 11
But celebrities aren’t the only ones cashing in via this medium: ordinary users on
Instagram are commonly paid hundreds to thousands of dollars to promote a product as well.
Danielle Bernstein, a fashion blogger with over 1.1 million followers, charges anywhere between
$5,000 and $15,000 for a single branded Instagram post.42
Advertisers are turning to this method
more and more every day because of its effectiveness, so instruction on how to navigate these
waters is needed.
b. Regulation and Guidance Thus Far
Some guidance already exists in navigating this area despite the concept’s relative
infancy. Publications put out by the FTC and various trade associations have attempted to
develop the law surrounding this issue, with mixed results.
i. Administrative Interpretation for Endorsements and Testimonials
41
Ad.ly and IZEA match advertisers with celebrities based on content, desired audience, and
number of followers. Kornowski, supra note 38. Opendorse is a company that specializes in
athlete social media campaigns. See http://opendorse.com/.
42
Alexandra Ma, How To Make Money On Instagram, HUFFINGTON POST (July 31, 2015),
http://www.huffingtonpost.com/entry/make-money-on-
instagram_us_55ad3ad6e4b0caf721b3624c.

13. 12
In 2009, the FTC issued an administrative interpretation regarding the use of
endorsements and testimonials in advertising.43
Though “native advertising” isn’t explicitly
referenced in the text, the guidance served as a stepping stone in establishing more concrete rules
concerning the matter. The move was meant to deter deceptive practices in advertising and
explained that paid endorsements must reflect the honest opinions, findings, beliefs, or
experience of the endorser and may not convey any express or implied representation that would
be deceptive if made directly by the advertiser.44
While it was noted that the interpretation did
not purport to cover every possible use of endorsements in advertising,45
it provided examples as
to what did and did not constitute deceptive practices: a celebrity endorser claiming a kitchen
product would cook a chicken in 30 minutes when it actually took an hour could be held liable
for a false statement, whereas a film star endorsing a particular food product in a commercial
predicated on points of taste and individual preference did not have to disclose a relationship
because “such payments likely are ordinarily expected by viewers.”46
Even with this minute
guidance, problems with disclosure still ensued, and the advent of later technologies further
obfuscated the issue.
i. The IAB “Playbook”
43
Guides Concerning Use of Endorsements and Testimonials in Advertising, 16 C.F.R. § 255
(2009), available at http://www.ecfr.gov/cgi-bin/text-
idx?SID=701066299822530421fece37367c91d3&mc=true&node=pt16.1.255&rgn=div5.
44
Id. at §255.1.
45
Id.
46
Id. §255.5.

14. 13
In late 2013, the Interactive Advertising Bureau (IAB) — a non-profit trade association
tasked with developing industry standards for the online advertising industry — released a
“Native Advertising Playbook” (Playbook) intended to offer a framework for thinking about and
developing ads that convey a message and avoid confusion, helping “sellers sell and buyers
buy.”47
The Playbook provided industry guidance for advertising disclosure, thus bringing
greater clarity to the market.48
The Playbook also categorized “native ads” into six types: (1) in-feed units, (2) paid
search units, (3) recommendation widgets, (4) promoted listings, (5) in-ad with native element
units, and (6) custom, “can’t be contained” content.49
Further, it listed common language for
companies to use in delineating their ads.50
Clarity and prominence of this disclosure is
paramount such that a reasonable consumer should be able to distinguish between what is paid
advertising vs. what is pure editorial content.51
While the IAB’s guidance was helpful in
corralling the collective input of companies throughout the advertising industry, it failed to set
forth legally enforceable measures for compliance. Even after the IAB’s insightful guidance,
Buzzfeed’s vice president of agency strategy and industry development said more discussion on
47
NATIVE ADVERTISING PLAYBOOK, supra note 20.
48
Id.
49
Id. at 5.
50
“Advertisement,” “ad,” “promoted” and “sponsored” are among the suggestions on how to
delineate paid-for content. Id. at 9.
51
Id. at 15.

15. 14
how to label “native ads” was needed.52
Chris Cunningham, CEO and cofounder of a mobile ad
company, described the guidelines as a “good first step” but again questioned whether the rules
would be adaptable to new technologies.53
ii. ASME Weighs In
The American Society of Magazine Editors (ASME) weighed in on “native advertising”
as well in saying promotion on websites and social media posts should be “clearly labeled” and
advertising should be visually distinguished from editorial content.54
The group’s April 2015
guidelines further advised that advertisements that mimic the “look and feel” of the print or
digital publication in which they appear may deceive readers and should be avoided.55
ASME’s
instruction mostly focused on clear and conspicuous labeling for print publications and mailings
and offered little help in terms of content originating online.
c. The Federal Trade Commission
52
Katy Bachman, Native Ad Workshop Leaves FTC Perplexed, ADWEEK (Dec. 4, 2013),
http://www.adweek.com/news/advertising-branding/native-ad-workshop-leaves-ftc-perplexed-
154303.
53
Id.
54
Editorial Guidelines, ASME (Apr. 15, 2015), http://www.magazine.org/asme/editorial-
guidelines.
55
Id.

16. 15
The FTC was established in 1914 by passage of the Federal Trade Commission Act56
to
investigate and regulate “unfair methods of competition … and … unfair or deceptive acts or
practices in or affecting commerce ...”57
Since then, the FTC’s role has expanded to encompass
examining pre-merger notification filings, addressing consumer complaints, and investigating
fraudulent and misleading reports in the media.58
Perhaps the FTC’s most important role, though,
concerns enforcement for purposes of consumer protection. Notable cases initiated under the
FTC’s enforcement power include a settlement with Google for unlawful placement of tracking
“cookies” and a $108 million settlement with Bank of America for cheating hundreds of
thousands of customers facing foreclosure on their homes.59
The FTC has a long history of
56
Our History, FTC, available at https://www.ftc.gov/about-ftc/our-history.
57
15 U.S.C. § 45 (2012), available at https://www.law.cornell.edu/uscode/text/15/45.
58
See A Brief Overview of the Federal Trade Commission’s Investigative and Law Enforcement
Authority, FTC, available at https://www.ftc.gov/about-ftc/what-we-do/enforcement-authority;
Cases and Proceedings, FTC, available at https://www.ftc.gov/enforcement/cases-proceedings.
59
Google Will Pay $22.5 Million to Settle FTC Charges it Misrepresented Privacy Assurances to
Users of Apple’s Safari Internet Browser, FTC (Aug. 9, 2012), https://www.ftc.gov/news-
events/press-releases/2012/08/google-will-pay-225-million-settle-ftc-charges-it-misrepresented;
FTC Returns Nearly $108 Million to 450,000 Homeowners Overcharged by Countrywide for
Loan Servicing Fees, FTC (July 20, 2011), https://www.ftc.gov/news-events/press-
releases/2012/08/google-will-pay-225-million-settle-ftc-charges-it-misrepresented.

17. 16
enforcing deceptive advertising cases as well.60
“Native advertising,” though new, has
additionally caught the eye of the administrative agency.
i. The FTC’s First Attempt to Formulate Guidance
The same year the IAB released its Playbook, the FTC hosted a one-day workshop to
educate attendees on the dangers of blending advertisements with news, entertainment, and other
editorial content across digital media.61
The event, entitled “Blurred Lines: Advertising or
Content?,” brought together publishing and advertising industry representatives, consumer
advocates, academics, and self-regulatory groups to explore the ways in which sponsored content
is presented to consumers online and the contexts in which it should be made identifiable.62
FTC Chairwoman Edith Ramirez, who spoke at the event, agreed that “native ads” can bring
great benefit, though she warns it still “has to be done lawfully.”63
Others, including FTC Staff
Attorney Lesley Fair, explained the Commission’s history of adjudicating the matter.
Though the workshop hoped to clarify the many misunderstandings of “native
advertising,” in actuality it “raised more questions than it answered.”64
Representatives from
60
See Patricia P. Bailey & Michael Pertschuk, The Law of Deception: the Past as Prologue, 33
AM. U.L. REV. 849 (1984).
61
Blurred Lines: Advertising or Content? – An FTC Workshop on Native Advertising, FTC (Dec.
4, 2013), https://www.ftc.gov/news-events/events-calendar/2013/12/blurred-lines-advertising-or-
content-ftc-workshop-native.
62
Id.
63
See supra note 27, at 8.

18. 17
Buzzfeed, the Wall Street Journal, the IAB, and the American Society of Magazine Editors gave
mixed opinions when queried about whether a set of hypothetical “native ads” were deceptive.65
The only consensus among the panelists and speakers was that transparency and disclosure are
important, though they could not agree on how it should be done.66
ii. The FTC‘s 2015 Policy Statement
In December of 2015, the FTC finally offered official guidance by spelling out its rules
for “native ads.”67
In explaining the evaluation criteria, the policy statement said that the
Commission will scrutinize the entire ad by examining its overall appearance, including the
similarity of its written, spoken, or visual style to non-advertising content offered on a
publisher's site, and the degree to which it is distinguishable from such other content."68
Moreover, when labels such as "advertisement" are found to be necessary, they need to be
prominent upon first contact with consumers. For example, disclosures that subsequently inform
consumers of a natively formatted ad's commercial nature after they have clicked on and arrived
at another page will not cure any misleading impression created when the ad is presented in the
64
Bachman, supra note 52.
65
Id.
66
Id.
67
Barr, supra note 13.
68
Id.

19. 18
stream of a publisher site.69
"The more a “native ad” is similar in format and topic to content on
the publisher's site, the more likely that a disclosure will be necessary to prevent deception.”70
Regarding content shared across social media, the FTC mentioned that consumers would
be unlikely to ordinarily perceive much content as anything other than paid commercial content
and that disclosure before imbedded videos begin to play is not always necessary.71
However,
some denotation that there is sponsored content is imperative.72
Not much more was said in
terms of sponsored user-created content like celebrity posts on social sites like Facebook, Twitter
and Instagram. While more inclusive and instructive than its predecessors, the FTC’s 2015
guidance still leaves many questions unanswered on what is allowable in this regard.
iii. The Lord & Taylor Settlement
Acting under its authoritative power, the FTC put into effect its first-ever enforcement
action involving “native advertising” when it brought suit against clothing retailer Lord & Taylor
in March 2016. A year earlier, Lord & Taylor had partnered with a number of influential
Instagram users in an effort to help promote its brand. The planned advertising campaign
consisted of 50 fashionistas posting a picture on the social media site donning the same Design
69
Id.
70
Id.
71
Id.
72
Id.

20. 19
Lab dress.73
The clothing item sold out quickly, in a move meant to interact with consumers in a
way they “consum[e] content every day.”74
However, none of the users disclosed the fact that the
company had paid them for the promotion. After ample investigation, the FTC brought forth
charges against the company with the aim to protect consumers by showing the company had
misrepresented the independent and objective nature of the source.
The two parties reached a settlement: though the exact terms of the settlement are
unknown, in settling the charges, Lord & Taylor is prohibited from misrepresenting that paid ads
are from an independent source, and is required to ensure that its influencers clearly disclose
when they have been compensated in exchange for their endorsements.75
III. DISCUSSION
As alluded to above, advertisers constantly quibble to create material that is compliant yet
compelling. Material marked with clunky hashtags can seem stale and disingenuous, and the
public today expects celebrities and influencers to partner with brands in a way that feels
73
David Griner, Lord & Taylor Got 50 Instagrammers to Wear the Same Dress, Which Promptly
Sold Out, ADWEEK (Mar. 31, 2015), http://www.adweek.com/news/advertising-branding/lord-
taylor-got-50-instagrammers-wear-same-dress-which-promptly-sold-out-163791.
74
Id.
75
Lord & Taylor Settles FTC Charges It Decieved Consumers Through Paid Article in an
Online Fashion Magazine and Paid Instagram Posts by 50 “Fashion Influencers”, FTC (Mar.
15, 2016), https://www.ftc.gov/news-events/press-releases/2016/03/lord-taylor-settles-ftc-
charges-it-deceived-consumers-through.

21. 20
authentic, relevant and conversational.76
That said, there can be dire consequences when an
endorser doesn’t disclose this relationship. The FTC’s 2015 guidance and subsequent
enforcement against Lord & Taylor shows, if anything, that the agency is ready to enter the fray.
But there are those that feel the FTC hasn’t done enough in explaining what can and can’t be
done in the context of “native ads” and paid social posts.
a. Industry Response to the FTC’s 2015 Policy Statement
The IAB has stated that while it applauds the FTC for putting “native advertising”
guidance into the marketplace, it is weary that the regulations are “technically feasible, creatively
relevant, and [do] not stifle innovation.“77
Marketing professional David Rodnitzky explains that
the question remains on whether these new regulations will have any bite at all. He further
predicts that tough enforcement will shut down aggressive ad networks, lead to a decline in
overall effectiveness, and garner predictability which will allow big brands to join the fray
without fear of brand dilution.78
As Forbes contributor David Schwab points out, advertisers and
76
David Schwab, No, You Don’t Need To Write #Ad In Your Promoted Tweet, FORBES (Jan. 11,
2016), http://www.forbes.com/sites/davidschwab/2016/01/11/no-you-dont-need-to-write-ad-in-
your-promoted-tweet/#54611daf3195.
77
IAB Concerned About FTC Guidance on Native Advertising, IAB (Dec. 24, 2015),
http://www.iab.com/news/iab-concerned-about-ftc-guidance-on-native-advertising/.
78
David Rodnitzky, Now That The FTC Has Spoken On Native Advertising, What’s Next?,
MARKETING LAND (Jan. 12, 2016), http://marketingland.com/now-ftc-spoken-native-advertising-
whats-next-158262.

22. 21
endorsers do not explicitly need to include #ad, #sp or #sponsor in a paid-social post: all they
need to do is reasonably disclose that there is a business relationship between the person writing
the post and the property, brand or product they are promoting.79
As is shown, balancing
advertisers’ innovations with the demands and desires of consumers still yields mixed opinions
and varied results.
b. Constantly Evolving Issues that the Policy Statement Fails to Capture
Problems still exist regarding regulation and enforcement in this area. As it relates to
athlete and celebrity endorsers, the FTC’s case against Lord & Taylor demonstrates the need to
clearly delineate a paid endorsement, though the settlement serves as a subtle slap on the wrist
instead of actual enforcement aimed at providing direction. No concrete ruling was given, and
advertisers are simply left with the overly-ambiguous premise that their targeted marketing must
be conspicuously labeled.80
i. The Brand Ambassador Dilemma
Consumer use of the internet is constantly evolving, and the continuous delay of clear
instruction only leaves these problems compounding. For one, what happens if an endorser
promotes a product on their own volition, then subsequently gets signed to be a brand
ambassador? At what point must this business relationship be disclosed? Former Seattle
79
Schwab, supra note 76.
80
See supra note 75.

23. 22
Seahawks running back Marshawn Lynch’s habit of eating Skittles after every touchdown
became a national media obsession and eventually parlayed into a monetary deal with the brand
in 2014.81
But even before he got paid, he would prop up the candy in interviews and his mother
would even post pictures of her in a football jersey with a bag of Skittles on social media.82
Under the FTC’s guidelines, Lynch would now have to disclose this beneficial relationship,
though he hasn’t always done so.83
Likewise, the confectionary affiliate of Mars, Inc. referenced
Lynch’s spectacular play by posting “Awesome touchdowns make Skittles taste better …” before
the business relationship had fully bloomed84
: this sends a cloudy message to consumers that the
endorser is impartial when true intent is no longer known. Lynch’s paid endorsement of Skittles
81
Darren Rovell, Marshawn Lynch gets sweet deal, ESPN (Jan. 28, 2014),
http://espn.go.com/nfl/playoffs/2013/story/_/id/10363225/super-bowl-marshawn-lynch-seattle-
seahawks-agrees-deal-skittles; see also Marshawn Lynch sells Skittles on home shopping
channel, SPORTS ILLUSTRATED (Sep. 1, 2015), http://www.si.com/extra-
mustard/2015/09/01/seattle-seahawks-marshawn-lynch-skittles-commercial.
82
Clare Farnsworth, The Truth Behind Marshawn and Those Skittles, SEAHAWKS.COM (Jun. 27,
2012), http://www.seahawks.com/news/2012/06/27/truth-behind-marshawn-and-those-skittles.
83
See Marshawn Lynch (@MoneyLynch), “24 for life. Thanks @Skittles for the custom
jersey!”, TWITTER (5:23 PM, Mar. 11, 2014),
https://twitter.com/MoneyLynch/status/443497434790916096. While Skittles is mentioned in the
post, there isn’t a denotation that this is a paid advertisement/endorsement.
84
Skittles (@Skittles), “Awesome touchdowns make Skittles taste better, and I didn’t think that
was even possible!”, TWITTER (8:40 PM, Jan. 19, 2014),
https://twitter.com/Skittles/status/425080416429539329.

24. 23
is not prominent85
and a reasonable person may not ordinarily know the extent of the
relationship.86
On the other hand, it could be argued that someone who follows Lynch on social media
might be familiar with his extracurricular activities and endorsements: as such, they would have
greater awareness of what brands he does and does not align with and would not be as prone to
being fooled when the distinction isn’t so clear. Viewing the paid social media post as a whole
would not be apt to cause confusion.87
While this argument may hold some merit, the terms of
Lynch’s deal were never made apparent to the public,88
and his expanding popularity and reach
across the entertainment spectrum makes the business relationship more vulnerable to scrutiny
and enforcement. The same could be said for other influencers who freely advetise a particular
product and are rewarded for the publicity, like Instagrammers who receive complimentary
clothing or in the case of the Denver Broncos, 50 cases of crisp cool beer.
ii. The “Stock Market” for Professional Athletes
The FTC’s guidance thus far also fails to account for existing and emerging technologies,
such as the market for buying and trading stock tied to the career of famous athletes. NFL Pro-
Bowl player Vernon Davis is as much concerned with his abilities on the field as his image off of
85
See supra Part II and corresponding footnotes.
86
Id.
87
Id.
88
Rovell, supra note 81.

25. 24
it. With an endorsement portfolio that already includes KRAVE Beef Jerky89
and a variety of
fitness products, Davis is oft considered a walking billboard for corporate companies. Davis is
also the test subject of Silicon Valley start-up Fantex, Inc.’s entrepreneurial idea to allow
professional athletes to sell stock in their own personal brands.90
The company paid Davis $4
million for 10 percent of his future income from playing contracts, corporate endorsements and
appearance fees in 2014.91
Because stockholder dividends are tied to the success of Davis’
personal brand, he is essentially operating as his own business on behalf of Fantex: must he
always disclose this business relationship in his tweets, media appearances, and other
interactions with the public? While the future of this stock-trading endeavor is all but certain,92
it
paints a picture that the market is still riddled with doubt as to what is and isn’t acceptable in the
context of paid social posts and “native advertising,” pointing toward the premise that the FTC’s
current level of insight and enforcement is unacceptable.
89
Mark Antonation, Denver Broncos Product Endorsements Turn Toward Jerky, WESTWORD
(Feb. 3, 2016), http://www.westword.com/restaurants/denver-broncos-product-endorsements-
turn-toward-jerky-7572259.
90
See Daniel Roberts, NFL star Vernon Davis talks about being a stock, FORTUNE (Jun. 6,
2014), http://fortune.com/2014/06/06/fantex-vernon-davis-buck-french-nfl/.
91
William Alden, Vernon Davis Breaks His Silence Over Fantex I.P.O., N.Y. TIMES (Jun. 4,
2014), http://dealbook.nytimes.com/2014/06/04/vernon-davis-breaks-his-silence-over-fantex-i-p-
o/?_r=0.
92
Fantex’s first financial experiment with former Houston Texans running back Arian Foster
was rescinded due to injury. Myles Udland, Arian Foster isn’t going public anymore, BUSINESS
INSIDER (Nov. 18, 2015), http://www.businessinsider.com/fantex-pulls-ipo-2015-11.

26. 25
iii. Other Issues Concerning Paid Social Posts
Beyond the “official” market illustrated above, some athletes and socialites are so closely
associated with a certain brand that nearly anything they do or say will reflect on their sponsor.
Michael Jordan and Tiger Woods are almost synonymous with the Nike brand93
– how can
consumers differentiate what is and is not a paid social post when an athlete is paid a reported
$100 million over a five year span to endorse a product? Moreover, the FTC cannot possibly
police the entire internet, so how will the agency choose what and what not to prosecute?
Sometimes it’s not so easy to signify “sponsored content” for verbal speech. What if Manning
had posted a video clip of his postgame interview on social media? Would he have to disclose
the fact that he had been paid for the statement? What if CBS had posted the clip of Manning
making the statement instead? The lines are being blurred more and more every day and it’s not
so easy to distinguish the difference between a person promoting a product from a personalized
Snapchat account versus a player like Manning saying something during a live TV broadcast and
the video content going viral. Sports agents often receive a commission on negotiated contracts,
and angel financiers and academies like IMG that invest in young tennis stars also have an
interest in the image of athletes94
– must these associations be disclosed as well? If so, how? The
93
Brian Rogers, Mother seeks justice from Nike and Michael Jordan in her son’s murder,
HOUSTON CHRONICLE (Feb. 2, 2016), http://www.houstonchronicle.com/news/houston-
texas/houston/article/Mother-seeks-justice-from-Nike-and-Michael-Jordan-6802244.php.
94
See Tennis Angels, IMAGINATION FOR PEOPLE,
http://imaginationforpeople.org/en/project/tennis-angels/; Danielle Rossingh, Next Sharapovas

27. 26
FTC balked at the chance to establish more clear-cut guidelines when it settled with Lord &
Taylor and now there is no real binding precedent. As is, the guidelines serve little to no solace
in being able to clear up these important issues from an athlete and celebrity standpoint.
c. Proposed Solutions to the Paid Social Post Problem
While there may not be one clear-cut solution for reconciling the opinions of all of those
in the advertising industry, the endorsement of products online is a burgeoning market and is
thus important to address. Though ASME discourages the use of advertisements that mimic the
“look and feel” of the print or digital publication in which they appear, the widespread use of
“native ads” is inevitable and more concrete rules need to be crafted for everyone’s benefit.95
Perhaps another FTC workshop is in order to further educate in this field, with advertisers and
endorsers alike weighing in on what works for them and what doesn’t. Input from consumers is
imperative as their opinion is ultimately what determines what is misleading and deceptive. The
FTC also needs to be more about the bite instead of the balk: instead of settling with companies
that clearly violate the rules that are in place, the administrative agency needs to establish
binding precedent so that companies are clear on what types of practices and ad campaigns they
can engage in. Special attention needs to be given to the role of the FTC on paid media and
Cost $400,000 as Teen Champs Disappear, BLOOMBERG (Jan. 26, 2011),
http://www.bloomberg.com/news/articles/2011-01-26/budding-sharapovas-cost-parents-400-
000-as-teen-tennis-champs-disappear.
95
Supra note 55.

28. 27
social posts instead of a broad, blanket ban on everything not marked with a hashtag or a
“sponsored” sign. The collective input of all can help answer these questions than add to them.
IV. CONCLUSION
As access to athletes and celebrities’ lives expands due to technology and tools like social
media, so do the possibilities for problems associated with it. Popular people are paid by
advertisers to promote products across all platforms. The FTC, tasked with preventing unfair and
deceptive practices in or affecting commerce, has stepped into the ring and tried its hand in
providing uniform rules for all to follow. Though the FTC’s 2015 Policy Statement regarding
“native ads” addresses this form of advertisement to a greater extent than its predecessors, it is
by no means comprehensive, and problems still exist in deciphering what can and must be done
to denote paid-for content. The rules assume consumers are not competent enough to reconcile
the differences between material that is meant for marketing and material that is more
unobtrusive. Tougher enforcement by the FTC would provide more lucidity in this area, and
more marketing opportunities would likely be made available because more established
companies wouldn’t be afraid to enter the fray. While it’s unrealistic to think that a complete
rulebook regarding “native advertising” and paid social posts will be written come February of
next year, hopefully further rulings and guidance by the FTC will provide clarity and have
advertisers and endorsers clinking glasses of beer instead of wondering about the rules regarding
their endorsement.