The Federal Trade Commission (FTC) doesn’t play around. That’s especially true when it comes to the consumer protection agency’s disclosure requirements for sponsored video game reviews on social media. This is what Burbank, California-based company Warner Bros. Home Entertainment learned in 2016. Warner Bros. has been in business since the 1920s and has long been at the forefront of the entertainment industry. But it was the FTC’s requirements for modern media that tripped up the company.
The FTC alleged that in late 2014, Warner Bros. gave YouTube video game influencers free advance versions of the game “Middle-earth: Shadow of Mordor.” The goal was for influencers to promote it within the gaming community. But that wasn’t all there was to the marketing campaign for the game. Warner Bros. also paid the influencers thousands of dollars to positively promote the title in the gameplay videos they created and posted on social media.
The sponsored videos were a big hit with gamers, receiving more than 5.5 million views. “Middle-earth: Shadow of Mordor” sold nearly 850,000 units globally in its first week of release. The problem, according to the FTC, was that Warner Bros. failed to adequately disclose that the video endorsements were paid for. The FTC charged that Warner Bros. deceived consumers by misrepresenting the influencers’ videos as independent, objective reviews of the game.
The FTC charged that Warner Bros. gave the influencers briefings with specific instructions on what the company expected of the influencer-created gameplay videos. Among those requirements was that the videos were to promote positive sentiment about the game and Warner Bros. They weren’t allowed to show any bugs or glitches the game might have had. Videos also needed to include calls to action with links to a website that showed viewers how to play the game.
Problems with Disclosure Placement
The FTC’s complaint found issues with the influencers’ placement of the sponsorship information — the disclosures weren’t clear and conspicuous. That’s because Warner Bros. directed the influencers to put the sponsorship disclosures in the description boxes below their YouTube videos. They should’ve put the disclosures in the actual videos, where consumers would be more likely to see them.
There were issues on social media, too. Mobile devices often only show the first three lines of social media content unless viewers click “Show More.” In this case, consumers had to click the “Show More” buttons on different platforms to fully see the disclosures.
Ironically, one gamer perhaps unintentionally proved the FTC’s point about the inadequate placement of the disclosure. The influencer wrote in the Show More box: “This video was sponsored by Warner Bros.” And then, the gamer added, “No one reads this far into the description…what are you doing snooping around.”
Warner Bros. instructed the influencers to post the videos on Twitter and Facebook, but these posts lacked “Show More” buttons for the disclosures. To address disclosure issues, the FTC published “.com Disclosures: How to Make Effective Disclosures in Digital Advertising.” These guidelines explain that platforms that don’t make clear and conspicuous disclosures possible shouldn’t be used for ads that require them. The influencers potentially shouldn’t have used Facebook or Twitter posts to promote the game because the platforms didn’t clearly show disclosures.
Some influencers disclosed that they were able play the game for free in their videos. However, they didn’t mention that they’d received payment to promote it. In at least one case, the FTC alleged that Warner Bros. even reviewed and approved one of the sponsored videos. This video didn’t include a proper disclosure.
Warner Bros.’ payment to the influencers for posting the videos is what the FTC calls a “material connection.” Material connections can include relationships like family or business ties — or when an advertiser gives payment or free product to an endorser.
They’re connections that could potentially sway the endorser to discuss the product in glowing terms, even if that description doesn’t accurately reflect the endorser’s experience. The FTC requires that these types of relationships between advertisers and endorsers be disclosed. That way, consumers aren’t misled into believing that the endorsement is an independent, impartial review of the product.
FTC guidelines require that a disclosure stays on the screen long enough for consumers to read it. The reviewer should verbally tell the audience that the content is sponsored so consumers can both read and hear the disclosure.
Ensuring Future Compliance
In settling the charges, the FTC ordered Warner Bros. to ensure the compliance of any similar future influencer campaigns. That means that Warner Bros. is also responsible for educating anyone they hire to work on the campaigns. The company must explain what employees need to know regarding required sponsorship disclosures and train staff accordingly.
The entertainment company is also to monitor future videos created by influencers for Warner Bros. to ensure compliance. The FTC determined that in some cases, Warner Bros. could even be required to withhold payment from or terminate ad agencies or influencers if they didn’t comply with the disclosure requirements.
Finding Details About Disclosure Requirements
Brands, influencers and marketers need to be well-versed on sponsorship disclosures. This helps them avoid potential scrutiny and law enforcement action by the FTC. You can find the FTC guidelines about influencer endorsements clearly spelled out in the FTC’s “Endorsement Guides: What People Are Asking.” This publication features common questions about endorsements and no-nonsense answers to those queries.
The Guides answer questions about the best ways to make disclosures on a variety of social media platforms, including Twitter, Facebook, Instagram and Snapchat. They also caution against using hashtag disclosures at the end of a stream of other hashtags. The Guides further discuss effective types of language to use in disclosures to ensure clarity.
One straightforward explanation of the FTC’s clear and conspicuous standard? Advertisers should treat disclosure placement the same way they would the placement of marketing messages. Put it front and center, where consumers can see it right away. The disclosure should be unavoidable.
Companies might hire public relations firms, ad agencies or influencers to run their social media campaigns. But company marketing leaders need to remember it’s ultimately the responsibility of the company to ensure that disclosure requirements are met.
That’s why it’s essential for a company to train and monitor other people working on its social media campaigns. A company should also make sure the entities it works with have disclosure training programs in place. It’s a good idea for companies to ask those involved with its social media campaigns for regular reports and to monitor the campaigns for compliance.