In yet another sign that the FTC is serious about enforcing its
now not-so-new Testimonial and Endorsement guides, the agency
just reached a settlement with Machinima over an influencers'
campaign designed to promote Microsoft's Xbox One and several
game titles for the console. And, on a related note, if your
company doesn't already have policies in place for social media
marketing campaigns, put this blog down now (well, close the
screen) and start putting one together now.
So what's a Machinima other than something that sounds like
part of a Seinfeld episode? Machinima involves the use of computer
graphics to create a cinematic production. See an example here:
Machinima Inc. is a gaming and media streaming website and
multichannel network. Machinima has agreements with various
individual videogamers to produce video content under its brand and
distributes such content on its YouTube channel. According to the
FTC's complaint Machinima offered all of its
"influencers" the opportunity to create content for its
YouTube channel that endorsed Microsoft's Xbox One system and
several games. The influencers were given very specific direction
for these videos including such things as:
2-3 talking points detailing features you're looking
Announce you will be playing a particular game
Showcase products in a positive light
Some influencers were compensated per video while others were
compensated based on total views. Machinima did not require
disclosure of the payments and, in fact, according to the FTC, some
of its agreements specifically required the influencer to keep
their compensation "confidential." At the end of the day
there were over 30 million views of the videos, that may not top
"Gangnam Style" but that's not too shabby either.
The FTC's settlement with Machinima sets out some fairly
stringent monitoring requirements, including providing influencers
with a statement of responsibility, reviewing videos prior to
providing compensation, conducting a second unannounced review
after uploading and disciplining any influencer that fails to
adequately disclose any material connection. Interestingly, the FTC
declined to bring an action against Microsoft or its agency because
it found that they had policies in place designed to prevent such
practices and quickly took steps to remedy the situation once it
became aware of the issue.
While some have referred to the internet and social media as the
wild, wild west. Clearly the sheriff has arrived. Now may be a good
time to check or recheck that your social media activities are FTC
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Marketers and their agencies are seeing increased regulatory scrutiny of their influencer campaigns as the popularity of influencers continues to grow and influencer networks become a greater marketing force.
The continuing growth in native advertising is leading to increasing regulatory scrutiny into whether consumers can distinguish native advertisements from surrounding non-paid content, and whether disclosures are being used effectively.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).