Earlier this week, the FTC announced that Warner Brothers entered into a consent order as a result of a complaint charging failure to adequately disclose that the video game publisher paid influencers to promote a new video game called Middle Earth: Shadow of Mordor via YouTube in 2014.

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The story of Middle Earth: Shadow of Mordor serves as yet another cautionary tale about the obligation to disclose material connections in native advertising.

Through its advertising agency, Warner Bros. hired a group of social media influencers to create buzz about Shadow of Mordor on YouTube by posting positive videos of game play. The influencers were given free access to a pre-release version of the game and paid anywhere between a few hundred dollars and tens of thousands (!) of dollars. According to the complaint, the contracts for the campaign required the following of each influencer:

  • Video will feature gameplay of the Shadow of Mordor video game
  • Video will have a strong verbal call-to-action to click the link in the description box for the viewer to go to the game’s website to learn more about the game, to learn how they can register, and to learn how to play the game.
  • Video will promote positive sentiment about the game.
  • Video will not show bugs or glitches that may exist.
  • Video will not communicate negative sentiment about WBIE, its affiliates or the game.
  • One Facebook post or one Tweet by Influencer in support of Video.

Interestingly, Warner Bros. required that the influencers include an FTC compliant disclaimer disclosing that the post was sponsored in the written description for the video. The contract also required the influencers to receive pre-approval before posting the videos.

So what prompted the FTC complaint? Some videos, despite having been preapproved, had no disclosure of the sponsorship; other videos only stated in the description that the game was provided for free, but there was no disclosure of the payment made to the influencer; and the majority of videos did not include a disclosure in the actual video (as opposed to the description). In addition, because of the placement of the disclaimers in the latter part of the descriptions for the videos, even when they were present, the disclaimers were only visible after clicking “see more” and they did not re-appear on the Facebook or Twitter posts.

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While the consent order does not make any mention of a monetary payment, Warner Bros. agreed to be subject to twenty (!) years of fairly strict compliance and monitoring. If you advertise through influencers, we recommend that you read the order in full, but here are some tips from Middle Earth to make sure you can keep playing:

  • Advertisers are responsible for ensuring that the advertising agencies and social media influencers they hire are not committing acts of unfair competition or deceptive acts or practices.
  • If influencers are paid to promote a product or service, that payment should be prominently and clearly disclosed. Same goes for free products or any other material benefits provided.
  • To avoid deception in videos, a clear and prominent disclosure is necessary in the video itself. The disclosure should be on the screen long enough to be noticed, read and understood. For longer videos, you may have to repeat the disclosure at periodic intervals.
  • Disclosures must “travel” with re-posts to social media sites. For example, when the influencers in the Warner Bros. campaign tweeted about their videos, they should have included a disclosure such as #paidpost or #ad in the tweet and/or a written disclosure on the thumbnail of the video.
  • For printed disclosures, make sure they’re not hidden “below the fold.” As the exhibits to the FTC’s complaint showed, the location of the written disclosure for many of the videos were only visible when a user hit the “see more” link. If the disclosure had been at the top of the description, it wouldn’t have been hidden. The same goes for Instagram and other social media sites – if you include a disclaimer at the end of a description or comments, it may be get hidden and therefore will not be deemed effective.