Warner Bros and the FTC: An Influencer Marketing Cautionary Tale

When it comes to influencer marketing, the FTC is keeping close tabs on disclosures, as evidenced by a recent string of settlements. Last week, for example, Warner Bros. finalized a settlement proposed in July alleging that it deceived consumers during a marketing campaign for the video game, Middle Earth: Shadow of Mordor. Specifically, influencers like PewDiePie were paid anywhere from thousands to tens of thousands of dollars to promote the game without disclosing that videos were part of a paid campaign. The FTC states that the videos in question were viewed over 5.5 million times. PewDiePie’s videos, in particular included a brief note in the description about being sponsored by Warner Bros., but viewers had to expand the description to make it visible. While there were other influencers involved in the campaign, only PewDiePie was mentioned in the official press release.

Warner Bros. just acquired popular gaming video company, Machinima, which was also slapped for failure to disclose paid endorsements earlier this year. Now that Warner Bros. has been “double slapped” by the FTC, as it were, the media giant will have to be even more careful about its disclosure practices from here on out.

You may think that influencer marketing would be more difficult if viewers know a recommendation is paid for, but consider this—a whopping 70 percent of teenage YouTube subscribers trust influencer opinions over traditional celebrities. A recent study also revealed that 86 percent of women turn to social networks before making a purchase.

These networks want influencer marketing on their channels, too. YouTube has introduced easy disclosure tools for influencers, as well as a community with which to help build a loyal audience. Twitter’s recent Engage update offers monetization for influencer posts, as well. Instagram’s new “see more” features are lucrative options for verified accounts and Mentions allow for easy tagging of other users, including brands.

Is influencer marketing worth it if the FTC is so strict? Absolutely, and here’s why—number one, clearly disclosing a relationship builds trust. No one wants to buy something based on a dishonest review. Number two, influencer audiences consider that person to be a friend, and often see a new business relationship as good news for that person. Vincent Juarez, Principal at the Influencer Orchestration Network explains this phenomenon. “Michelle Phan was thrilled about working with Marvel and TinyCo as the voice of Jessica Jones in the Avengers Academy app, said Juarez. “She knew her fans would be happy for her. Part of her disclosure was right in the video as she spoke about her excitement about doing the voiceover work.”

Featured image source: MovieWeb