Screen Shot 2014-04-07 at 12.00.30 PMSee that little word above the sponsored content piece, paid for by The Economist and written by the editors? It’s called “Advertisement.” And good for Josh for using that word in that context. No one’s confused; the labeling is very clear; and TPM gets some revenue. So why do you think this standard is not applied to Phrma? It couldn’t be because they pay extra for the chance of deceiving readers, could it?

Is “deception” the right word? Over to David Rodnitzky:

The FTC’s defines an action as deceptive:

“If it is likely to mislead consumers who are acting reasonably under the circumstances and if it would be material to their decision to buy or use the product.”

So is an ad that looks like editorial content “likely to mislead”? As far back as 1968, the FTC discussed a newspaper advertisement for a restaurant that “uses the format and general appearance of a news feature . . . [and] purports to give an independent, impartial, and unbiased view,” concluding:

“Since the column, in fact, consists of a series of commercial messages which are paid for by the advertisers, the Commission is of the opinion that it will be necessary to clearly and conspicuously disclose that it is an ad.”

Rodnitzky’s core point is that much of native advertizing is illegal but that the money is so overwhelming, the FTC so toothless, and the ad-gambits so new, that readers can only rely on themselves to sort out fake articles from real ones. Good luck with that. The publishing industry has much too much money riding on this to help you out.

By the way, my recent Harvard lecture on journalism, ethics and sponsored content can now be viewed here.