United States: Beware, TV Companies: Regulators Are Watching More Than Your Shows

Article by Vejay G. Lalla and Madhu Goel Southworth

How the Federal Trade Commission has caught up to new forms of marketing on social media and beyond — and what advertisers can do about it

In the days of Don Draper, viewers consumed television advertising through a single medium: a tube television. Today, consumers are using computers, tablets and other mobile devices more than ever to consume television content such as second-screen offerings and web series where the talent itself was born online as a YouTube or Vine star. Consumers hear about shows from influencers, read reviews and discuss shows on social media. In other words, they do not just watch television — they experience it.

In order to keep up with this expanded viewer experience and to address various technological challenges such as ad blocking, DVR or other ad skipping, advertising has evolved. Some entertainment companies now sponsor show reviews, or work with brand sponsors to create custom content (from commercials to vignettes), or pay influencers to promote themselves or their brands in social media.

This marrying of content and promotion allows sponsors to better monetize their brands to guarantee exposure with their target audience. But what happens when the media company, network, studio, production company or even the talent becomes the advertiser?

Regulators are paying attention to this question more than ever. Historically, the Federal Trade Commission considered television product placement a common activity that was unlikely to deceive consumers because the nexus between the sponsor and the media company was obvious. With influencer and native digital content, however, the FTC has a different view in certain cases.

Whether in the form of branded videos, celebrity Instagrams or in-app sponsorships, as influencer and native digital marketing continues to grow, the FTC has taken recent steps to remind both entertainment companies, brands and even gamers that online native or influencer content may require increased disclosure and transparency and, when needed, that all parties involved must comply.

This means that whether you are The Rock promoting the new season of "Ballers" or HBO sponsoring blog posts about "Game of Thrones," you need to watch out.

WHAT SHOULD YOU WATCH OUT FOR?

In the past year, the FTC updated its Endorsement and Testimonial Guides, emphasizing the need to disclose material connections between influencers and marketers in social or digital channels, reiterating that pins, likes and other social activity requires disclosure where there is a material connection between a marketer and a third party influencer — or even a consumer if the consumer is incentivized to post such as through a sweepstakes or contest. Such material connections can range from monetary incentives, to free goods, or even where a person is employed by the company they are promoting.

In December 2015, the FTC issued new guidance on native advertising, requiring all involved parties to include disclosures about the source of sponsored content where it may not be obvious to the consumer. These guidelines specifically target areas such as custom video content, in-app game content, and other online content that typically is in the same format as the editorial content on the publishing site and is commercial in nature.

So what does this mean? Don't assume that the rules are the same for broadcast television and online. Increasingly, content providers and brands are partnering to push out co-branded entertainment videos via influencer networks where the sponsored content and other independent content are all blended by the publisher in the same format. Though product integration in broadcast television may be obvious, the FTC's recent native advertising guidance reminds businesses that product placement in online video may require disclosure particularly where the publisher format creates the impression that the content is editorial to the consumer.

In such cases where there is a commercial message and it isn't obviously advertising (e.g., an in-game billboard ad), the FTC mandates more definitive disclosures, such as "Advertisement" or "Sponsored Advertising Content" and requires those disclosures as close as possible to the content and lead in pages prior to the content being engaged with by the consumer, a far different standard than the promotional consideration credits at the end of a broadcast television show.

Where marketers merely fund the online content but do not create or influence it, and there is no commercial message or endorsement, a disclosure may not be mandated by the new FTC guides; however, a "sponsored by" or "presented by" notation may still be recommended for marketers to use akin to Budweiser sponsoring the Super Bowl.

The FTC has also emphasized disclosure where celebrities or influencers are paid or incentivized — even through free products — to promote brands, especially on social media. Given the enormous impact of influencers on consumers, regulators require all such endorsers to disclose any material connection to a brand — for example, by way of a hashtag such as #ad or #sponsored and not #sp, #spon, or #promoted. In fact, just several weeks ago, the FTC went after a major retailer who tapped a network of "influencers" to wear its new line of products on social channels and seeded native content without disclosure.

HOW TO PROTECT YOURSELF

  • Make Disclosures When Needed. There are times when sponsored content is obvious, particularly when posted to a network's own site (e.g., a branded tune-in spot) or where there is no commercial message, endorsement, or deceptive format that misleads the consumer and in such cases, disclosure is not necessary. But in other cases, make sure appropriate disclosures are included if, for example, the marketing content is being placed or published across influencer or third party platforms where the connection to the marketer may not be clear to consumers based on the format or other similar circumstances.
  • Ensure Disclosures Are Appropriate. Work with your IT and marketing teams to ensure that disclosures are made in a clear and proximate manner. When needed, disclosures should be appropriate to the particular social media platform or website (e.g., prior to a video being played on YouTube) and if such content can be re-posted or re-shared, the disclosures need to follow.
  • Monitor Your Brand. All entertainment marketers must be aware that making disclosures in certain cases is a requirement of doing business. Monitor your influencer or other partners to make sure disclosures are being made.
  • Allocate Liability. Think ahead. Develop guidelines internally and contractually to ensure that partners comply with your policies on social media and native advertising.

In the modern era of television, native content and endorsements are powerful tools to promote and create custom content for you or your brand sponsors. As advertising continues to evolve, there is less of a distinction than ever between content and advertising. In other words, the glorious run of "Mad Men" may have just come to end, but the collision between entertainment and advertising is just beginning. And the regulators are catching up.

Originally published on www.thewrap.com, April 20, 2016.

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.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Sheppard Mullin Richter & Hampton
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Sheppard Mullin Richter & Hampton
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
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).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions