The Competition and Markets Authority found that Starcom and TAN had "arranged for endorsements in online articles and blogs on behalf of MYJAR, a short-term loan provider, without making it clear that they were advertising", according to a press release from the watchdog. The amount or nature of these hidden ads was not disclosed.
The two agencies and MYJAR itself have all now promised to "ensure all advertising and other marketing in articles and blogs is clearly labelled or identified so that it is distinguishable from the opinion of a journalist or blogger".
A spokesman for the CMA said the three businesses all co-operated and worked constructively with the CMA during its investigation.
Separately, the CMA has written to 66 companies to warn them against such practices, and says it will soon publish further guidance in the form of open letters on its website. It follows a call for information around the issue published by the watchdog in February 2015, and two investigations that concluded into marketing businesses in February and in March respectively.
Nisha Arora, CMA senior director, consumer, said: "Failing to identify advertising and other marketing, so that it appears to be the opinion of a journalist or blogger, is unlawful and unacceptable.
"The businesses being promoted, the marketing companies arranging promotions and publishers of online articles all need to play their role and maintain trust online by ensuring that advertising and other marketing is clearly distinguishable from editorial content and that this is not hidden from the consumer.
"The CMA will continue to enforce the law so that consumers can have confidence in the reviews or opinions they read online."
This article was first published on prweek.com.