If you saw these links under an article you just finished reading, would you be surprised to learn that the links are sponsored? The NAD thinks you might.

Taboola is an advertising network that purchases space from online publishers on behalf of its clients, places ads in those spaces, and earns money based on the number of clicks on the ads. The ads are labeled in a variety of ways including, “You May Like” (as above), “More in the News,” or “Recommended Videos.” One of Taboola’s competitors argued that because the labels are vague, consumers might mistakenly think the ads link to editorial content.

The NAD agreed, despite Taboola’s “promoted content” or “ sponsored content” disclosures on the top-right of the ads. The NAD was concerned that the placement of the disclosures in the upper right hand corner appeared in a place “that consumers are less likely to notice and read.” Even the name of the sponsor below the ads was “not sufficient to disclose to consumers that the links are paid links.”

The NAD recommended that Taboola more clearly disclose that ads are sponsored content by increasing the size, and improving the placement, of its “promoted” or “sponsored” disclosures. The NAD also cautioned that the combination of the image, article title, and name of the destination site should not mislead consumers about what’s on the landing page.

This is the second NAD decision on native advertising we’ve discussed this year. Like the previous decision, this one suggests that the NAD believes that consumers are likely to be confused by native ads and that the disclosures advertisers typically use are not sufficient.

New NAD Decision on Native Advertising Focuses on Disclosures