Like the FTC, NAD has long been interested in the product review
ecosystem and, in particular, in review sites that purport to be
impartial and independent. As NAD has often noted, consumers assign
significant credibility to information provided by review sites
when making their purchasing decisions and, therefore, “when
information obtained from a review site is not impartial and
independent but rather influenced by a commercial relationship, the
reliance consumers place on such information may result in
concomitant harm.”
At issue in its latest case is a site operated by Smile Prep,
challenged by SmileDirectClub, a maker of clear alignment
(invisible braces) products. The site provides information to
consumers about teeth straightening and teeth whitening products
and services and ranks and rates clear aligner products. As
described by NAD, the site, which has affiliate relationships with
several companies whose products are reviewed, presents its content
as editorial, based on “honest, impartial assessments of its
editorial staff and independent from any bias or control from the
clear aligner companies,” as well the unbiased and honest
opinions of consumers with experience using the products.
SDC argued that while Smile Prep presents the reviews as
impartial, they are not: rather, SDC says, “the clear aligner
companies reviewed by Smile Prep are forced to either pay affiliate
link commissions to Smile Prep or be unfairly disadvantaged in
Smile Prep’s rankings and reviews.” Smile Prep countered
by arguing that there is a separation between the editorial staff
doing the rankings and review and the staff handling the affiliate
relationships and that the affiliate partners have no right to
review or approve the site content. Therefore, Smile Prep argued,
the content is true editorial and NAD has no jurisdiction to
address it.
NAD rejected Smile Prep’s challenge to NAD jurisdiction on
two very important bases: (1) although Smile Prep is not selling
products and the content is available for free, “a sale is not
necessary for content to be considered advertising”. Further,
the advertiser’s claims about the independence and genuineness
of its reviews “promote its review content and persuade
consumers of the value of the service that the Website
provides” and is therefore advertising for the site; and (2)
although Smile Prep’s content is not the clear aligner
companies’ own advertising, since those companies did not pay
for, disseminate, approve, or otherwise control the product claims,
the content is “advertising” because of the impact of the
affiliate links.
In making this latter determination, NAD distinguished Smile
Prep from two of its earlier cases involving affiliate links, BuzzFeed and Verizon Media. In those cases, NAD considered
whether product claims in online publishers’ product reviews
were advertising and determined that they were not, notwithstanding
the presence of affiliate links in the reviews. In both cases, NAD
found that the publishers created product recommendations
independent of any “economic or commercial
motivation” introduced by affiliate marketing revenue and that
the affiliate link was not placed in paid-for advertising. Rather,
as NAD determined in the BuzzFeed case, the “primary economic
motivation behind [BuzzFeed’s] product recommendations was the
same as the motivation behind its other digital news and
entertainment content—to attract page views and develop a
readership.”
Here, however, the Smile Prep content is updated (even if not
originally posted) by editorial staff with knowledge of which
companies have affiliate links. Further the “editorial team is
also aware that revenue generated from affiliate commissions is a
primary source of funding for the Website’s operations
(including writer salaries).” Smile Prep itself acknowledges
on the site that affiliate relationships affect the site content,
including by promoting deals and discounts for its affiliate
partners’ products. Accordingly, NAD determined that the
product claims are a paid commercial message and, thus,
“national advertising” subject to NAD review.
Further, in a statement with potentially far-reaching
implications, NAD cautioned that if a publisher site does not
maintain appropriate controls to separate its editorial team from
the influence of affiliate revenue, “the content can be
influenced by knowledge of payment, rendering it advertising.”
While maintaining this separation may be challenging for publishers
hosting review sites, particularly publishers with small staffs,
“the burden on publishers is outweighed by the consumer
interest in truthful and transparent advertising. Consumers should
not be misled by product reviews that appear to be independent and
impartial, but which are influenced by the relationship between the
publisher and the product being reviewed.”
Having determined that the site is “advertising” and
subject to its review, NAD then analyzed the specific claims
challenged by SDC about the site’s review methodology and
impartiality, and recommended modifications. It also recommended
that Smile Prep clearly and conspicuously disclose that Smile
Prep’s rankings, reviews, and product information are
advertising. With respect to the consumer reviews posted on the
site, while NAD recommended that Smile Prep clearly disclose the
material connection between the reviewers and Smile Prep (i.e., the
incentive paid for the reviews), it did find that Smile Prep’s
collection, moderation, and posting practices provide a reasonable
basis of support for its implied claim that its reviews reflect the
real experiences of legitimate clear aligner consumers: all reviews
are posted, positive and negative; incentives are offered for
reviews for both affiliate partner products and non-partner
products; and reviews are not edited or curated to highlight only
the positive.
The Decision also addresses specific product claims, not
addressed here. (But if you’re in the dental product business,
you’ll want to review the Decision in full). The Advertiser
Statement indicates that Smile Prep plans to appeal the Decision to
the NARB.
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Selz is not engaged herein in rendering legal advice, and shall not
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