Warner Bros. Home Entertainment Inc. recently settled an action arising out of a 2014 advertising campaign for its video game, Middle Earth: Shadow of Mordor. As part of the campaign, Warner Bros. hired a social media agency to engage popular YouTube influencers to promote the game. The campaign included 30 gameplay videos by YouTube personalities that were viewed over 5.5 million times in the span of a year. Warner Bros. gave the influencers a free pre-release version of the game and paid the influencers (up to tens of thousands of dollars) in exchange for posting gameplay videos that met specific requirements. Warner Bros. required that the posts include a strong call-to-action to go to the website for the game, and that the posts only communicate “positive sentiment” about the game. The FTC’s complaint alleged that Warner Bros. falsely represented the videos were independent reviews and deceptively failed to disclose the material connection between Warner Bros. and the influencers.

The influencer contracts required the influencers to disclose the post was “sponsored,” but Warner Bros. did not require the disclosure be above the fold in the video description, nor did Warner Bros. require a disclaimer within the video itself. As such, most of the influencers only placed the disclosure “below the fold” (meaning that the disclosure was not visible at all unless the viewer clicked on the “show more” button), and the vast majority of the influencers did not include a disclosure within the video. The FTC took issue with the “below the fold” placement, alleging that consumers were unlikely to view the disclosures. Additionally, the FTC noted that consumers were even less likely to view the “below the fold” disclosures when the influencers included the embedded video in Tweets and Facebook posts.

The FTC also took issue with the content of some of the disclosures that merely disclosed the influencer received the product for free, but omitted the fact that the influencer was also paid to create and post the video.

The proposed consent order requires Warner Bros. to have a signed agreement with all influencers engaged by Warner Bros. acknowledging their responsibility to disclose their material connection; to monitor influencers to ensure compliance; and to terminate and stop paying non-complying influencers.

TIP: This recent action by the FTC further clarifies the FTC’s views as to what is necessary to make a clear and conspicuous material connection disclosure. Disclosures should be placed above the fold in video descriptions, although a disclosure in the video itself is probably a good idea in most cases. Additionally, social posts that embed a video or that drive viewers to the video should also include a clear and conspicuous disclosure. Lastly, advertisers should make sure that the content of the disclosure accurately reflects the nature and extent of its material connection to the influencer: a disclosure that an influencer was given a product for free likely does not adequately disclose the full extent of the material connection if the influencer was also paid to post a positive review.