If what LA Times says is true, that the advertisement is clearly segregated from articles on its own news feed and is tagged accordingly, I don't see what they are doing wrong. After all, print magazines have had "special advertising sections" spanning multiple pages as far back as I can remember. The problem is with Google and, again, unless LA Times is not telling the whole story, Google has nothing to gain by displaying someone else's advertisement as a news story, so they don't have incentive to do something like that on purpose (Google makes most of its money through its own ads. Why would it want its users to see someone else's?).