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FTC Settles with Warner over Paid 'Influencers'
When the Federal Trade Commission (FTC) ramped up its scrutiny of so-called “native” advertising this year, regulators faulted the department store chain Lord & Taylor for failing to disclose that seemingly objective promotions of a clothing collection were, in fact, paid for by the fashion retailer. Then in July 2016, the FTC showed that a company can make disclosures but still fall short of being fair to customers.
The FTC reached a settlement with Warner Bros. Home Entertainment Inc. over allegations the company failed to clearly disclose that it paid online “influencers” for videos promoting Middle Earth: Shadow of Mordor, a video game loosely based on The Hobbit and the Lord of the Rings trilogy.
As part of the late-2014 digital marketing campaign, Warner Bros. instructed the influencers to include a disclosure in the description box below the videos. But the disclosure was buried “below the fold” in the description box and only visible if viewers clicked the “show more” button, according to the complaint. On social media sites such as Twitter and Facebook, where the influencers were told to promote their YouTube videos, the posts did not include the “show more” button, according to the FTC.
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