The Federal Trade Commission (FTC) announced today that Warner Bros. Home Entertainment, Inc. has settled charges that it deceived consumers with its 2014 marketing campaign for the “Hobbit”-inspired video game “Middle Earth: Shadow of Mordor” by failing to adequately disclose that it paid digital influencers — including top YouTube star Felix Kjellberg (a.k.a. PewDiePie) — thousands of dollars to post positive gameplay videos on YouTube and other social media. The campaign racked up more than 5.5 million views.
It marks another victory in the FTC’s crackdown on digital influencer promos that don’t sufficiently disclose their brand ties that has already won settlements from Lord & Taylor and Machinima (which is owned in part by Warner Bros.).
According to the FTC’s complaint, Warner Bros. paid the influencers from hundreds to tens of thousands of dollars, gave them a free advance-release version of the game, told them how to promote it, and required them to promote the game in a positive way and not disclose any bugs or glitches they found.
The FTC contended that the resulting videos were essentially paid ads for “Shadows of Mordor,” and Warner Bros. failed to require the influencers to “clearly and conspicuously” disclose the fact in a place where consumers were likely to see them. (For instance, the notification on PewDiePie’s sponsored video — which received more than 3.7 million views — appears below the “Show More” fold on YouTube.)
“Consumers have the right to know if reviewers are providing their own opinions or paid sales pitches,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection, in a statement. “Companies like Warner Brothers need to be straight with consumers in their online ad campaigns.”
The FTC’s proposed order settling the charges prohibits Warner Bros. from failing to make such disclosures in the future or otherwise portraying gameplay videos distributed as part of marketing campaign as the objective, impartial experience of the digital influencers.
The FTC order also spells out the minimum steps that Warner Bros. or any entity it hires to execute an influencer campaign must take to ensure compliance, including educating influencers about sponsorship disclosures, monitoring sponsored influencer videos for compliance, and, in some cases, terminating or withholding payment from influencers or ad agencies for non-compliance.