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Kotaku: FTC Slams YouTube Group For 'Deceptive' Xbox Marketing Campaign

B

benny_a

extra source of jiggaflops
Article by Jason Schreier (http://kotaku.com/ftc-slams-youtube-group-for-deceptive-xbox-marketing-ca-1728237588)

Some excerpts:
Kotaku said:
Around the launch of the Xbox One, the YouTube network Machinima held a special campaign for its clients: Make a positive video about Microsoft’s newest console, and you’ll get paid extra. Also, you’re not allowed to talk about any of this.
[...]
In a press release today, the FTC announced that the two parties have come to a settlement that will prevent Machinima from pulling this sort of shadiness again. Writes the FTC: “Under the proposed settlement, Machinima is prohibited from similar deceptive conduct in the future, and the company is required to ensure its influencers clearly disclose when they have been compensated in exchange for their endorsements.”
Click to expand...

FTC with emphasis by Schreier:
Respondent paid influencer Adam Dahlberg $15,000 for the two video reviews that he uploaded to his YouTube channel “SkyVSGaming.” In his videos, Dahlberg speaks favorably of Microsoft, Xbox One, and Ryse. Dahlberg’s videos appear to be independently produced and give the impression that they reflect his personal views. Nowhere in the videos or in the videos’ descriptions did Dahlberg disclose that Respondent paid him to create and upload them. Dahlberg’s first video received more than 360,000 views, and his second video more than 250,000 views.
Click to expand...

Mostly quotes by the FTC press release:
“In numerous instances, Respondent has failed to disclose, or disclose adequately, that the individuals who posted the reviews were compensated in connection with their endorsements,” wrote the FTC. “This fact would be material to consumers in their purchasing decisions regarding Xbox One and the Launch Titles. The failure to disclose this fact, in light of the representations made, was, and is, a deceptive practice.”
Click to expand...

Check out the full article, as it also includes how such an "influencer program" is structured and what it entails.

-------------

Update #1 - If anyone wants to go through the original thread and see who was on the right side of history on that one. ;-)
atomsk said:
Ah yes, XB1M13, I had done a YouTube video about this at the time and got quoted by The Guardian.

Here's the original thread about it
Click to expand...

Update #2 - Not a big fine:
Architechnophile said:
I did a little dive through the FTC's relevant documents.

Some things worth noting:

The settlement order itself

"Each violation of such an order may result in a civil penalty of up to $16,000." - I can't find it in writing, but I believe this would be leveled at Machinima. I think it's also worth noting that this is almost the same amount as Machinima paid YouTubers for the videos in the first place. Hard to see it as a stiff penalty, considering their likely profits.

The FTC waived Microsoft and Starcom of any responsibility in the matter. From the FTC: "while Microsoft and Starcom both were responsible for the influencers’ failure to disclose their material connection to the companies...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." - So the FTC holds Microsoft and Starcom responsible for the ethical breach, but appears to let them off the hook simply because they have a nominal policy against it.

The settlement is up for public comment for the next 30 days, electronically.
Click to expand...
 
N

Nokterian

Member
41622-Grumpy-cat-good-Rl59.jpeg
 
L

LiK

Member
Yea, heard about these issues on YouTube. Guess they're finally clamping down on it. Can't believe the amount of money they get for them.
 
B

benny_a

extra source of jiggaflops
What is good is that the FTC is doing something in combination with that the majority of the big multi-channel networks being based in the U.S.

I'm looking forward to a more transparent advertisement future and not this shady shit we have at the moment.
 
T

Troy

Banned
Is this like the Astro Gaming Team populating youtube with their own reviews of Astro products?
 
K

Kalor

Member
I remember hearing about this a while ago. It's nice that they are clamping down the whole thing more.
 
C

Chezzymann

Member
I feel like there should be some sort of blanket law that outlaws anything like this. Not just for machinima. Like, if you're being paid to promote something there should be some sort of signal that this is an ad or promotional material. (Obviously commercials are ads so they don't need to do that)
 
J

Jonboy

Member
I can almost guarantee youtube isn't the only place it's happening. It wouldn't surprise me if companies (not just MS) have full marketing teams devoted to posting online in message boards, comments sections, subreddits, etc. to steer & shape opinions. It's actually kinda scary when you really think about it.
 
A

AndyD

aka andydumi
Bear Cub in Sky said:
Didn't WB do something shady with Shadow of Mordor too?
Click to expand...

I'm sure most companies marketing teams do these types of things now and again. It's sometimes easy to spot it too, because the videos/reviews often use the same language, or highlight the same few specific things, likely due to instruction sets like the one above.

If nothing else this type of action should be a response for all those who say it never happens and such and such company would never do it.
 
S

samuraidino

Member
Bear Cub in Sky said:
Didn't WB do something shady with Shadow of Mordor too?
Click to expand...

I think the general gist of that one was you can show x amount of footage before release, but you're not allowed to mention this this and this show off this, also don't mention the Lord of the rings or reveal who your ghost pal is.
 
Plague Doctor

Plague Doctor

Member
Jonboy said:
I can almost guarantee youtube isn't the only place it's happening. It wouldn't surprise me if companies (not just MS) have full marketing teams devoted to posting online in message boards, comments sections, subreddits, etc. to steer & shape opinions. It's actually kinda scary when you really think about it.
Click to expand...

It wouldn't need to be internal teams. Many PR agencies offer services like "reputation management" in which they plant their entry level people to address questions, misconceptions, etc in a questionably consumer/peer tone. In theory and ideally, it's to prevent and combat false negative impressions (like baseless, misunderstood, and subjective reviews).In practice though... yeah.. well...astroturfing, shilling, or whatever you want to call it. It's cheap to run for those PR agencies who in turn can sell the service to companies at a premium.

Shadey times we live in. Thankfully, the trend is to crack down on this bs.
 
F

FDC1

Member
Jonboy said:
I can almost guarantee youtube isn't the only place it's happening. It wouldn't surprise me if companies (not just MS) have full marketing teams devoted to posting online in message boards, comments sections, subreddits, etc. to steer & shape opinions. It's actually kinda scary when you really think about it.
Click to expand...

We already had people banned for that here on GAF
 
R

RipperGrim

Member
Jonboy said:
I can almost guarantee youtube isn't the only place it's happening. It wouldn't surprise me if companies (not just MS) have full marketing teams devoted to posting online in message boards, comments sections, subreddits, etc. to steer & shape opinions. It's actually kinda scary when you really think about it.
Click to expand...

Product reviews online should always be taken with a grain of salt, it's a major issue, I think Samsung or some cellphone company like it got in trouble a while ago because they had paid for thousands upon thousands of positive reviews.

A friend of mines sister even had a side job online where the company she worked for would offer to give good reviews for what ever the client wanted. Manipulation like this is apparently big money.
 
R

Rats Off To Ya

Banned
Jonboy said:
I can almost guarantee youtube isn't the only place it's happening. It wouldn't surprise me if companies (not just MS) have full marketing teams devoted to posting online in message boards, comments sections, subreddits, etc. to steer & shape opinions. It's actually kinda scary when you really think about it.
Click to expand...

Surprise: it's verifiably true! A bunch of them got banned here around the Xbox One announcement. I'm sure there are Sony ones too, but I think they tend to be more subtle.
 
A

Architechnophile

Member
I did a little dive through the FTC's relevant documents.

Some things worth noting:

The settlement order itself

"Each violation of such an order may result in a civil penalty of up to $16,000." - I can't find it in writing, but I believe this would be leveled at Machinima. I think it's also worth noting that this is almost the same amount as Machinima paid YouTubers for the videos in the first place. Hard to see it as a stiff penalty, considering their likely profits.

The FTC waived Microsoft and Starcom of any responsibility in the matter. From the FTC: "while Microsoft and Starcom both were responsible for the influencers’ failure to disclose their material connection to the companies...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." - So the FTC holds Microsoft and Starcom responsible for the ethical breach, but appears to let them off the hook simply because they have a nominal policy against it.

The settlement is up for public comment for the next 30 days, electronically.
 
S

SwiftDeath

Member
RipperGrim said:
Product reviews online should always be taken with a grain of salt, it's a major issue, I think Samsung or some cellphone company like it got in trouble a while ago because they had paid for thousands upon thousands of positive reviews.
Click to expand...

http://www.engadget.com/2013/10/24/taiwan-fines-samsung-for-astroturfing-internet-comments/

Taiwan fines Samsung for astroturfing internet comments
Astroturfing (false grassroots) campaigns are usually reserved for promoting unpopular causes, but Samsung apparently disagrees. Taiwan's Fair Trade Commission has just fined the company NT$10 million ($340,333) for marketing its already successful smartphone line through fake internet comments. Samsung allegedly asked third-party contractor Peng Thai to write forum posts that praised devices, trashed competitors and downplayed bad news.
Click to expand...
 
A

A-V-B

Member
FDC1 said:
We already had people banned for that here on GAF
Click to expand...

Only when they've been blatantly obvious. The best ones are probably still around. You might think they're normal users. You might even think they're your friends. But they're not.

And they could be..

anywhere.

tumblr_mjs7qyEBGi1s6guyso1_400.gif
 
B

barit

Member
Jonboy said:
I can almost guarantee youtube isn't the only place it's happening. It wouldn't surprise me if companies (not just MS) have full marketing teams devoted to posting online in message boards, comments sections, subreddits, etc. to steer & shape opinions. It's actually kinda scary when you really think about it.
Click to expand...

Yeah I know what you mean especially when I do the same but for free! Fuuuck me
 
N

nynt9

Member
Ah, I remember this, but I didn't think anything would actually come out of it. I'm glad it did, because a lot of people look to youtubers as a legit source of opinion so ensuring the sanctity of that is very important.
 
F

freeofgreed

Member
Good, the complete lack of ethics
:)
in the youtube gaming community is something that needed to be addressed. I've also heard that this is a big issue among the make up/beauty community there as well.
 
P

PeskyToaster

Member
Rats Off To Ya said:
Surprise: it's verifiably true! A bunch of them got banned here around the Xbox One announcement. I'm sure there are Sony ones too, but I think they tend to be more subtle.
Click to expand...

Sony ones were probably more prevalent during the PS3 launch with so much bad buzz. Kind of unnecessary now when console is so well received. The XB1 launch period was a crazy time, my first launch on GAF. Crazy Xbox users writing these long rants about the All-in-One entertainment system, chalkboards, and trying to start The One™ as a thing. Great stuff.
 
B

benny_a

extra source of jiggaflops
Architechnophile said:
"Each violation of such an order may result in a civil penalty of up to $16,000." - I can't find it in writing, but I believe this would be leveled at Machinima. I think it's also worth noting that this is almost the same amount as Machinima paid YouTubers for the videos in the first place. Hard to see it as a stiff penalty, considering their likely profits.
Click to expand...
I'm more interested in the future behavior and that disclosure gets better. Of course in the future this fine must increase as they've been made aware of it now and the next compliance breach would be willful instead of lol we're new media everything is different.

I added your post to the OP. I hope you don't mind.
 
T

thefit

Member
Chezzymann said:
I feel like there should be some sort of blanket law that outlaws anything like this. Not just for machinima. Like, if you're being paid to promote something there should be some sort of signal that this is an ad or promotional material. (Obviously commercials are ads so they don't need to do that)
Click to expand...

There is, this is the ftc enforcing it.
 
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