Warner Brothers gets fined by FTC, PewDiePie skates free

This should be familiar story by now, one that we've been writing about for more than a decade believe it or not, but yesterday people were shocked! Because another big wallet company jumping on the native content bandwagon ignored the FTC rules when they asked an influencer to pretend their review was independent and not paid for, and got their hand slapped as a result. Because even though the internet still seems like the wild west, people are still paying attention and there are rules.

In this case, Warner Brothers paid Felix Kjellberg, aka PewDiePie and nine other Youtube influencers to favorably review its game. But since they didn't clearly disclose it, Warner Brothers Home Entertainment got a dressing down from the FTC. The game in question was Middle Earth: Shadow of Mordor. According to CNET "Those involved in the campaign were paid between hundreds to thousands of dollars for their participation, created sponsored videos that garnered more than 5.5 million views, received advance-release copies of the game and were told how to promote it. The arrangement required the influencers to promote the game positively, and to not disclose any bugs or glitches found while playing." Because PewDiePie's video was watched 3.7 million times, he is now this year's poster child for smarmy behavior.

Warner Brothers is taking the blame for instructing its influencers to not disclose this information outright, to keep the sponsored ad under wraps and make it feel more native. How this was done was simple: put all the pertinent info beneath the "show more," link, knowing very few people would bother. And thus a hidden disclosure it was. The FTC had a field day with making Warner Brothers an example although they weren't fined so much as hauled in the principal's office.

Jessica Rich. director of FTC’s Bureau of Consumer Protection, said "Companies like Warner Brothers need to be straight with consumers in their online ad campaigns." And this is very true indeed. Where I call bullshit on the FTC is in letting the influencers like PewDiePie slide without also getting their asses handed to them, because there's not one damn influencer on Youtube or Steam or Twitch who doesn't know how this shit works by now. Moreover, PewDiePie isn't some independent gamer just doing it for kicks. He's a multi-millionaire who is part of Maker Studios. This year, he launched his own network called Revelmode, on Maker Studios which is itself a multi-channel network owned by Disney. Are you really trying to tell me no one at Maker Studios has any idea how this shit works? No one there ever said "Hey Swedish dude, maybe you should like, disclose the fact this isn't an independent review but you're being paid to like it?"

Deutsch L.A. settled with the FTC for deceptive advertising on Twitter. "One of Deutsch LA’s assistant account executives sent a company-wide email asking the agency’s staff to promote the PlayStation Vita ad campaign that the agency was working on by posting positive comments about the device on Twitter using the hashtag #gamechanger"...but didn’t disclose their connection to the agency or Sony. The FTC claimed these tweets were misleading because they didn’t reflect the views of actual consumers who had used the device."

The FTC also went after fashion retailer Lord & Taylor for similar practices stemming from late 2014. The FTC's rules have more or less been unchanged since 2010, stating one has to disclose the relationship between endorser and brand in a clear manner, so one can't claim ignorance. The endorsement guides were updated in 2012 with what amounts to a "no, really, we mean it," underscore. My point is, there is no one on Youtube or in social media from 2010 on who is not aware of best practices. PewDiePie can't even claim Swedish ignorance since Maker Studios is based in Culver City in Los Angeles.

And for full disclosure: I used to work on a video game account and talked to some of the people at Maker Studios when we wanted to use one of their influencers, (not PewDiePie.) What I know for a fact is the big name influencers whether part of Maker or not are repped by agents, who are in the business of making money. Maker Studios has this to say on its page:

"Maker understands all aspects of YouTube content creation and what it takes to build a successful digital career. We cultivate new creators, take existing creators to the next level and build lasting brands with engaged audiences.
Maker develops sustainable programming and builds large audiences. Offerings to partners may include development, production, promotion, distribution, sales, marketing, access to royalty free music for content creation, and custom merchandise solutions."

The other party in question who should be held accountable in my opinion is Plaid Social Labs the social media firm hired by Warner to broker the deal. Plaid Social Labs "told influencers to only disclose that the review was sponsored content at the bottom of the “Show More” box beneath the video, rather than in the video itself. This meant viewers who didn’t click on the description, along with those who watched the review on Facebook or Twitter, would assume it was an independent opinion.
In some cases, reviewers completely failed to state that they had been paid to make the video. They only disclosed that they had received early access to the Lord of the Rings-based game." Considering how litigious advertising normally is, with Business Affairs cross checking so much, it's amazing to me Plaid Social gets away with this kind of behavior, too.

The FTC should go further than just filing complaints against the brand while letting the influencers and the majority of agencies go. Campaigns like this generally aren't created in a vacuum. Fingers need to be pointed at all guilty parties. It's the only way this issue will ever get fixed.

I know a lot of gamers are saying if you are too gullible not to realize these influencers are bought and paid for it's your own damn fault. And that's all well and good if you're an adult, but if you're a kid playing these games, your cognitive brain power isn't the same. Yes, I'm saying think of the children. It was the same during Saturday morning cartoons back in the day. You weren't allowed to advertise your product during your show because kids didn't know the difference. In other words, they weren't allowed to show G.I. Joe commercials during G.I. Joe the show. The same rules should apply because it's the same as some asshole like PewDiePie collecting tens of thousands of dollars duping kids into thinking he actually likes Mordor. For shame.

Adland® is supported by your donations alone. You can help us out by buying us a Ko-Fi coffee.
Anonymous Adgrunt's picture
Files must be less than 1 MB.
Allowed file types: jpg jpeg gif png wav avi mpeg mpg mov rm flv wmv 3gp mp4 m4v.
Dabitch's picture

People seem to not have noticed the updated FTC rules, as many are defending PewDiePie these days. I don't quite understand why some are defending him, though I've never understood the internet hordes who like to show me Bill Hicks "kill yourself" advertiser routine, while simultaneously falling for what I consider every unethical trick in the book.

For the tl;dr types, the new rules at FTC regarding youtube videos are "take it from the top", it's not enough to have it in the description below the fold, it has to be upfront and mentioned in the video as the FTC states so very clearly here.

If I upload a video to YouTube and that video requires a disclosure, can I just put the disclosure in the description that I upload together with the video?
No, because it’s easy for consumers to miss disclosures in the video description. Many people might watch the video without even seeing the description page, and those who do might not read the disclosure. The disclosure has the most chance of being effective if it is made clearly and prominently in the video itself. That’s not to say that you couldn’t have disclosures in both the video and the description.

There's simply no way that any of the agencies like Plaid Social Labs and Disney owned Maker Studios didn't know this, so I agree, they should have been fined as well. Or perhaps instead of.... It's bizarre that the client, who hired professionals to help them, get fined, but not the professionals who knowingly ignored the FTC rules. What a great way to make more people agree with Bill Hicks...

PewPewPew's picture

PewDiePie is Swedish so the FTC doesn't apply to him

kidsleepy's picture

Seeing how specific I was, I suspect it has less to do with the tl;dr types and more to do with the "dr but commented anyway" types.

Dabitch's picture

Yeah, there's always that. This was in 2014, and while Kjellström is a Swede like myself living somewhere in Europe. Plaid social, now BEN entertainment, are located in Utah in the same offices as turnkey social... Some people figure that because the FTC's "what people are asking...." layman page wasn't updated until May 2015, Kjellberg didn't do anything wrong. So, I agree with you that the agencies who bartered these promotions and so obviously went out of their way to instruct influencers to hide the paid endorsement lines should be fined, I also think that the influencers should know better as well. If you're paid from the US, by a brand in the US, while creating content on a platform hosted in the US and you yourself have founded your own agency in the US,... you're pretty much bound by the FTC despite being Swedish. ;) Oh, and in Sweden (Europe) the rules are a little stricter, and we're all very aware of that. Sponsored content has to be labelled upfront, not below.

Anyway, PewDiePie made a humorous video retort to all this which I can't watch because I break out in hives when I hear Swedish accents in English and get really stabby about that shit, but you might be amused.

fairuse's picture

Watched the video. So, humm, ah... How are the agencies involved untouched by FTC? Maybe the client fell on the sword in case FTC demanded documents that are more than just embarrassing? As for the video -- Okay, now it's 'the media's' fault for click-baiting me. Jeezeus, every public face in the game industry must pass the class called, "How to make people feel sorry for you 'cause I'm the victim".

Maybe I'm getting too cynical about how the industry works. It's not like the entire entertainment industry is in the business of smoke and mirrors to hide behind. Oh, sorry that was mean.

Dabitch's picture

> How are the agencies involved untouched by FTC?

That's the headscratcher, mate.