How to Illegally Sway an Election Using “Sponsored Content”
Bernie Sanders rallied tens of millions of voters by decrying the influence of corporate dollars in U.S. politics. But that’s not stopping big corporate donors from using his writing as part of illegal campaign advertisements.
That’s thanks, in no small part, to the failure of the Federal Trade Commission to police the “sponsored content” industry.
Despite Sanders disdain for corporate money, a lobbying group funded with nearly $4.5M from the American Beverage Association has been secretly promoting, via online ads, a Sanders Op-Ed.
The point is to convince voters defeat a soda tax ordinance on the ballot in Oakland, CA this November.
To do so, the No Oakland Grocery Tax PAC has spent tens of thousands of Big Cola’s dollars to drive online readers of major publications to a Sanders Op-Ed opposing soda taxes using “sponsored content” modules at the end of articles (like in the image below).
And it’s doing so without disclosing that the ad campaign was paid for by the PAC — in violation of California’s campaign finance law known as the Political Reform Act.
While it’s not always clear to readers, many modules at the end of news stories are filled with ads paid for by outside parties and displayed on a publisher’s site. Companies like Outbrain, ShareThrough and Taboola partner with publishers and share the revenue.
In an April Op-Ed, Sanders opposed a proposed Philadelphia tax on the grounds that it was “a regressive grocery tax that would disproportionately affect low-income and middle-class Americans.”
That’s a line of attack that Coca-Cola and Pepsi, among others, have been pushing in Oakland. No Oakland Grocery Tax PAC has used its millions of dollars to unleash a blizzard of direct mail, billboards and TV commercials, as well as Facebook, Google and Twitter ads.
By California law, PAC ads targeting a ballot issue need to prominently note the name of the organization paying for the ad and its biggest donor (.pdf see pps. 60–61).
No Oakland Grocery Tax PAC is doing neither with its “sponsored content” ads.
Those unlabeled ads were first placed in Outbrain and ShareThrough “sponsored content” ad units in media outlets like The Washington Post, CNN, New York Post and The Houston Chronicle.
According to financial filings, No Oakland Grocery Tax PAC has spent $39,562 with Outbrain as of September 30 (.pdf — see Schedule G).
The ads also showed up in “recommendations” on sites like the Daily Dot via a similar company called ShareThrough. However, the financial disclosure forms do not mention any payments to that company.
The ads simply promoted Sanders’s Op-Ed with no labeling on who paid for the ad, making it look like an editorial or paid recommendation from Philly Mag, the original publisher of the Op-Ed.
Readers who clicked the ads were taken directly to the Philly Magazine site.
The Sanders Op-Ed wasn’t the only story No Oakland Grocery Tax secretly paid to drive readers to.
No Oakland Grocery Tax also secretly paid to send readers to an anti-cola tax story on City Lab, a site owned by Atlantic Media, the parent group of the Atlantic. The PAC also paid to promote a column by Tom Barnidge in the San Jose Mercury News that was critical of a soda tax in Berkeley, Oakland’s neighbor to the north.
The ads appeared to be targeted at Oakland residents via their IP addresses as they did not appear once a location-masking VPN was turned on.
Unlabeled ads have been and remain rampant in “sponsored content” units powered by companies like Outbrain and Taboola, which have long resisted even labeling their modules as advertisements.
However, it is possible to include the name of the company paying for the ad. See the far right ad in the Outbrain example below, where MeUndies is paying to send readers to an Business Insider story.
“Sponsored content” companies make money when readers click on the “recommendations” and leave the publisher’s site to go off to an advertiser’s site. The “sponsored content” companies split the ad revenue with publishers, giving the companies financial incentives to disguise ads as publisher content to increase click-through rates.
While the Federal Trade Commission has promised since 2013 to crack down on unlabeled “sponsored content,” it’s failed to go after companies like Outbrain, ShareThrough, RevContent and Taboola. The FTC has instead focused on undisclosed paid reviews and product endorsements on YouTube and other social channels.
The National Advertising Division of the the Better Business Bureau, a non-governmental industry watchdog, did find in 2014 that Taboola was being deceptive in not labeling its units as ads, confusing readers who couldn’t tell the difference between an internal recommendation and a Taboola ad.
Unfortunately, the FTC’s longstanding inaction left open a wide hole for a big-pocketed special interest to secretly and illegally try to sway an election in the United States.
Only readers savvy enough to right click the ads to check the redirect links on the unlabeled ads would have any idea these “recommendations” were paid ads by a corporate-funded political group trying to influence an election.
(Full disclosure; I’m the co-founder and CEO of Contextly, which provides engagement tools, including internal recommendations, for publishers. We are not an ad company, and do not provide “sponsored content”; our recommendations are *internal* to our publisher clients.
Also, I’m not a fan of regressive taxes or cola. I’m an Oakland resident, and I will likely vote against the cola tax.)
When I discovered these ads, I tweeted to both Outbrain and No Oakland Grocery Tax. I then followed up with another tweet (below), adding that the ads looked like a violation of campaign finance law.
Some time after those tweets, the No Oakland Grocery Tax “sponsored content” ad campaigns changed, but they were still running as of October 6th.
While the ads still lack the required disclosures in the new configuration, readers are no longer taken to the original sites.
Instead, the group copied the text of the stories and the Bernie Sanders op-ed and re-published the pieces on its own site. (Republished Bernie Sanders Op-Ed (below), republished City Labs article, republished Mercury News column).
This appears to have been done without permission — even though republication of a news article usually requires paying for that right.
A representative for Atlantic Media’s syndication service said she had no record that the City Lab piece had been legally licensed.
The Sanders campaign did not respond to an email asking if Sanders had licensed his Op-Ed to a corporate lobbying group, though, given his stance against PACS, that would be highly unlikely.
That leads to the conclusion that not only is No Oakland Grocery Tax violating campaign finance laws, they are also likely violating copyright and stiffing at least one news outlet.
Additionally, those new landing pages fail to prominently disclose who the PAC’s most prominent donor is.
Instead No Oakland Grocery Tax added a small notation at the end of the stories saying who paid for the site, which many readers would be likely to miss.
California campaign finance laws require those disclosures to be prominent.
Violations of California’s campaign finance law are investigated by the bipartisan California Fair Political Practices Commission, upon formal complaint.
But, more importantly, perhaps now that fake recommendations are now being used to distort an election, the FTC will finally crack down “sponsored content” fraud.
And just maybe “content recommendation” companies will actually be embarrassed enough to stop deceiving readers with unlabeled ads.
