Paid Content – Income Source or Booby Trap? 5 Tips for Getting it Right

Last week, we alerted our readers that the Federal Trade Commission was cracking down on paid endorsements and advertorials that appear to be objective news content. How can hyperlocal publishers avoid falling into this trap? It comes down to transparency. Read on more for steps you can take to stay on the safe, and profitable, side.

Two years ago, the Federal Trade Commission issued updated guidelines aimed especially at blogs that appear as legitimate editorial outlets reviewing products but concealed the fact that the reviews were paid for by advertisers or merchants. So, if you’re going to rely on paid content, or if any of your contributors are paid to provide a review or endorsement, here are some of the factors you need to consider:

• If you run an advertorial for a local business, such as yoga class, you must disclose that the content is a paid advertisement.
• If you obtain free services or a free sample to write a review for a local shop, you must disclose to the reader that you were provided the sample to write the review.
• If you are offered a free meal at a local restaurant to write a review, you must disclose the fact in your review.
• You must disclose if any of your writers or bloggers are sponsored by a particular advertiser or merchant.
• Your independent writers and bloggers must disclose if they were paid to provide an article or review.
• Contributors that provide endorsements or testimonials must have actually used the product or service and base their comments on personal experience; they may not provide endorsement or testimonials purely based on some script provided by an advertiser.

According to Mary Engle, associate director of the Bureau of Consumer Protection, these guidelines apply equally to online media as they do to more traditional media (such as print and broadcast). If you, as a hyperlocal news publisher, depend on users providing content, your terms of service should restrict users from providing content that is paid for by advertisers or providers of products or services.

Your terms of service also should disclose that your publication of content posted by users does not mean you endorse the comments made by such user — or that those comments represent the views of your site. A simple statement like “This site does not endorse any user submission or any content expressed by a user” should do the trick. Since hyperlocal publishers upload most user-generated content without much control and review, such as restrictions are appropriate for your terms of service.

An additional approach is to create and post an editorial policy on paid content. Sites such as, which provides local sports coverage, and its affiliate, have good examples of editorial policies in their terms of service. The guidelines would apply both to readers who provide content as well as anyone contributing content to your site.

Such guidelines would include disclosures about:

  • Whether a review (such as that of a local restaurant) was based on the fact that the business owner provided access to a product or service at no cost in exchange for a review.
  • Whether your editorial policies require an impartial review, even if the contributor was provided the goods or services to review at no cost.
  • Whether the contributor who reviewed the product or services, even if provided for free for evaluation, must be actually tested and used by the contributor.
  • Whether a ban should apply to any content in which a contributor has invested in a product or service.

These guidelines may become part of any agreement you have with contributors regarding the content they provide to your site.

Disclaimer: This article does not provide legal advice specifically to any reader or user of the Street Fight website. However, you can review these issues with your counsel who can help determine whether you strategy in providing content by users or contributors complies with FTC guidelines.

Brian Dengler is an eMedia attorney and journalist who covers legal issues in eMedia. He is a former Vice President of AOL, a former newspaperman and EMMY-winning TV journalist. He teaches eMedia management as an adjunct at Kent State University.

  1. November 16, 2011

    Thank you for sharing this Brian. I run a hyperlocal media site called the Battle Ground Buzz and I was considering doing “advertorials”. But now I’m not so sure I want to go down that road. Thanks for the info!

    1. Brian Dengler
      November 18, 2011

      Thank you for your comments. Joshua, there’s nothing wrong in offering advertorials; you simply need to make sure you disclose that the content is an advertorial, and disclose the nature of the sponsorship. There are no land minds if you are transparent. 

      1. November 18, 2011

        That’s a good way to look at it Brian. I’m finding that being open and transparent is the way to go for hyperlocal sites. I think it’s also another good way to set ourselves apart from big media. Thanks!

  2. November 17, 2011

    Excellent piece, Brian. Transparency really is an important key to credibility. In case you haven’t heard about it, here’s another tool that can help: The “TAO of Journalism — Transparent, Accountable and Open.” See for details and a Directory of who has signed up so far. It’s a simple voluntary pledge to be Transparent about who you are, who’s paying you, and where you’re coming from; Accountable if you make mistakes; and Open to other points of view. Those who take the pledge may post a seal on their websites or in print, as an open promise to readers, viewers and listeners. It’s no panacea, but in these days of dismal public trust in journalists, isn’t it worth a try? What else is working? Not much, that’s for sure.

    1. Brian Dengler
      November 18, 2011

      John, thanks for the reference to TAO of Journalism. 

Leave a Reply

Your email address will not be published. Required fields are marked *

Local Data DJs Can Spin Their Own Around Locationary’s ‘Saturn’