• by Richard Whitman , Columnist, September 2, 2015

An online influencer campaign for Starcom MediaVest Group client Xbox One managed by gamer lifestyle video entertainment network Machinima was found to have run afoul of FTC guidelines for disclosure. According to the FTC, Machinima paid two Xbox One endorsers a total of $45,000 for creating positive review YouTube videos and paid a larger group of influencers $1 for each 1,000 page views achieved but the company did not require the influencers to disclose they had been paid.

A settlement reached Wednesday prohibits Machinima from engaging in similar campaigns and the firm is required to disclose paid endorsements in all future campaigns it manages. Of the ruling, FTC Bureau of Consumer Protection Director Jessica Rich said, "When people see a product touted online, they have a right to know whether they're looking at an authentic opinion or a paid marketing pitch."

Positioning its deceptive actions as a favor to the industry, a Machinima statement read, "Machinima is actively and deeply committed to ensuring transparency with all of its social influencer campaigns. We hope and expect that the agreement we have reached today will set standards and best practices for the entire industry to follow to ensure the best consumer experience possible."

Regarding the role of Starcom and Microsoft in the matter, an FTC press release read, "while Microsoft and Starcom both were responsible for the influencers’ failure to disclose their material connection to the companies, Commission staff considered the fact that these appeared to be isolated incidents that occurred in spite of, and not in the absence of, policies and procedures designed to prevent such lapses"

An August 26th letter from the FTC to Microsoft and Starcom outline the findings of the Commission and indicate no enforcement action will be taken against either company .