Targeting influencer Internet ad campaigns
Print Edition
THE US Federal Trade Commission’s settlement this week with Warner Bros Home Entertainment Inc highlighted the regulator’s increasing focus on Internet advertising by so-called influencers or online personalities.
The agreement came after charges by the FTC that Warner Bros failed to adequately disclose thousands of dollars in payments to popular Internet celebrities for posting positive videos and reviews of the company’s game “Middle Earth: Shadow of Mordor.”
As part of the settlement, Warner Bros agreed to disclose payments to influencers in future campaigns or risk penalties or contempt charges.
The case is part of the FTC’s push to ensure Internet advertisers follow the same laws as traditional advertisers which call for disclosure when someone was “compensated to promote or review a product.”
The regulator’s action against Warner Brothers followed similar charges in the Spring against retailer Lord & Taylor.
According to the FTC, “Lord & Taylor paid 50 online fashion ‘influencers’ to post Instagram pictures of themselves wearing the same paisley dress from the new collection, but failed to disclose they had given each influencer the dress, as well as thousands of dollars, in exchange for their endorsement.”
As consumers have shifted from reading periodicals and watching television to surfing the web and perusing social media, companies increasingly rely on so-called influencer marketing campaigns, in which they pay or provide free goods to Internet personalities with large followings in exchange for praise of their products online.
The FTC revised its advertisement endorsement guidelines in October 2009 to include advertising through social media and word-of-mouth campaigns, such as influencer marketing.
Sarah McNew, chief product officer for SocialToaster, which assists brands with influencer marketing campaigns, said she was glad to see the recent FTC actions, even though they seemed to be “wrist slaps.”
“It’s really frustrating for us, following the rules, to see so many people not following them,” she said.
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