Warner Bros failed to adequately disclose that it paid some well-known video game fans thousands of dollars to promote "Middle Earth: Shadow of Mordor," the Federal Trade Commission said today.
“Consumers have the right to know if reviewers are providing their own opinions or paid sales pitches,” Jessica Rich, director of the FTC’s Bureau of Consumer Protection said Monday in a statement. “Companies like Warner Brothers need to be straight with consumers in their online ad campaigns.”
The FTC's complaint, unveiled today, alleges that Warner Bros. paid some "online influencers" -- including PewDiePie, who boasts 46 million YouTube subscribers -- to tout "Shadow of Mordor" in advance of its September 2014 launch.
The endorsers posted a total of around 30 videos on YouTube, which were viewed more than 5.5 million times, according to the FTC.
Warner Bros, through the agency Plaid Social, allegedly instructed the endorsers to "promote positive sentiment" about the game, and to refrain from showing any glitches, according to the FTC.
The endorsers also were told to say they were paid -- but to put that disclosure in a box underneath the YouTube videos.
"Respondent did not require that the YouTube influencers be instructed to place a sponsorship disclosure clearly and conspicuously in the video itself. Nor did respondent require that the YouTube influencers be instructed to place the sponsorship disclosure 'above the fold' in the description box, or visible without consumers having to scroll down or click on a link," the complaint alleges.
The settlement requires Warner Bros to disclose any material connections between itself and online endorsers in the future, among other terms.
This isn't the first time the Federal Trade Commission has taken a dim view of inauthentic endorsements. As far back as 2009, the agency made clear that bloggers need to disclose any "material connections" -- including payments -- between themselves and marketers.
Last May, the agency said in updated guidance that merely "liking" a company on social media, or posting a photo of one of its products to Pinterest, can be an endorsement. At the time, the FTC warned advertisers not to "encourage endorsements using features that don't allow for clear and conspicuous disclosures."
Earlier this year, the FTC settled with Lord & Taylor over a campaign promoting a sundress from the store's private-label line, Design Lab. The retailer gave the dress to 50 influential fashion bloggers, and paid them between $1,000 and $4,000 each to model it in photos posted to Instagram, the FTC alleged in that case.
The company told the bloggers to style the dress however they wished, and to mention it in the post by using @lordandtaylor and the campaign hashtag, #DesignLab. But Lord & Taylor allegedly failed to require the bloggers to disclose on Instagram that the post was part of an ad campaign.