FTC sharpens its teeth over home entertainment company’s lack of transparency on commercial relationship with influencers and payment for positive reviews – writes Scott Guthrie

According to the Federal Trade Commission’s website Warner Bros. Home Entertainment, Inc. has settled Federal Trade Commission charges that it deceived consumers during an influencer marketing campaign for the video game Middle Earth: Shadow of Mordor, by failing to adequately disclose that it paid online influencers.

Felix Kjellberg a.k.a PewDiePie was among the influencers included in the Warner Bros. influencer marketing campaign which saw gamers paid to post positive gameplay videos on YouTube and other social media platforms.

The Swedish gamer is the highest ranking YouTube video producer. Since starting to post to YouTube in 2010 PewDiePie has amassed 12.7 billion video views – averaging 4.3 million views per video.

SEE ALSO: PewDiePie Responds to FTC and Warner Bros. Disclosure Settlement

His YouTube channel now boasts 46.2 million subscribers – slightly more than the entire population of Spain.

The Warner Bros sponsored content has been viewed more than 5.5 million times since the campaign ran in 2014.

RELATED: Why it’s good business for influencer marketing to embrace disclosure rules

The role of the FTC is to protect US consumers by preventing fraud, deception, and unfair business practices in the marketplace. This includes native advertising, sponsored content and endorsements.

“Consumers have the right to know if reviewers are providing their own opinions or paid sales pitches,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Companies like Warner Bros. need to be straight with consumers in their online ad campaigns.”

According to a December 2015 Digiday article only 30% of publishers are in compliance with the FTC’s guidelines that address how ads are labeled, visibility of sponsor name and prominence of the label.

Whilst in the UK six in 10 marketing and PR professionals admit to flouting the UK’s official code around influencer marketing according to a survey by Takumi, an Instagram broker connecting creators with brands.

How to get influencer marketing disclosure right

The crux of meeting influencer disclosure rules internationally centres on three key areas:

  1. Disclose, clearly and prominently, whether content has been paid for
  2. Be open about other commercial relationships that might be relevant to the content; and
  3. Give genuine views on markets, businesses, goods or services.

Remember that ‘paid-for’ is not limited to financial payment. It can include free product, services or access to events.

RELATED: Is #FollowMeTo global travel brand falling foul of FTC?

Other commercial relationships may include being a business’s brand ambassador. The brand may not have paid for that particular content nonetheless it may be appropriate for the influencer to tell readers/viewers that they have a financial connection to the business.

Influencers should ensure that it is clear whose opinion or experience is being stated (i.e. their own or an advertiser’s).

It is this last point that Lesley Fair, a senior attorney at the FTC takes Warner Bros. to task on.

In a blog post for FTC Fair repeatedly calls out Warner Bros. for instructing influencers to ensure their videos “‘promote positive sentiment’ about the game,” “‘not show bugs or glitches that may exist’” and “‘not communicate negative sentiment’ about Warner Bros. Home Entertainment, its affiliates, or the game.”

As in April’s case against US retailer Lord and Taylor the FTC seems to be directing its ire against brands. However remember that brands, their public relations practitioners and the influencer are all responsible for ensuring that paid-for content is labelled properly and that the disclosure is displayed prominently.

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Scott Guthrie is a professional adviser within the influencer marketing industry. He is an event speaker, university guest lecturer, media commentator on influencer marketing and active blogger. He works with brands, agencies and platforms to achieve meaningful results from influencer marketing. That tells you something about him but it's not giving you a lot of detail, is it? So, read more here.

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