Influencers marketing is still a relatively new means of engaging with audiences, but it has grown to become a critical part of video game marketing campaigns—and it’s not just the games themselves that are benefitting from endorsements, as non-gaming brands have taken notice too. But not all publishers and influencers are following FTC disclosure guidelines, even though it was a video game that helped spark their creation.
A recent paper written by Princeton researcher Arunesh Mathur analyzing YouTube videos and Pinterest pins found that 90 percent of posts containing affiliate links did not disclose that they were sponsored, indicating problems with the entire influencer marketing space. Mathur’s paper points out that with gaming specifically, 21 out of 152 affiliates disclosed themselves on YouTube, so it’s not surprising that the is gaining more attention in the legal community.
“The most common mistake I hear about is companies and influencers assuming that it’s someone else’s job to figure out the proper disclosure,” Will Bucher, a lawyer at Debevoise & Plimpton, explained to AListDaily. “A large company hires an external agency assuming the agency will know the disclosure requirements; an agency assumes that an influencer remembers the guidance the agency provided during a previous engagement a year ago; or the influencers assumes if they had a disclosure requirement, someone in a suit would have told them. The truth is that when no one takes responsibility, everyone gets in trouble.”
With more video games being treated as a service, companies are becoming heavily invested in influencer and community marketing. Sources told AListDaily that they consider livestreaming a top priority channel, placing it among traditional marketing activities such as advertising. It’s a medium where broadcasters can talk directly with their audiences in an authentic way, showing games as they are, without hiding behind stylized or heavily produced marketing materials.
Bucher defines influencers as “non-traditional marketing,” meaning that they are campaigns based on personal recommendations and endorsements, both explicit and implicit. So, an ad that plays at the beginning of a Twitch stream is considered traditional marketing, while a streamer talking about a game he or she is playing is non-traditional. Predominantly wearing a certain brand of headphones during broadcasts also counts as non-traditional marketing.
“Most social media platforms facilitate traditional marketing, but increasingly it’s the recommendations and endorsements of the influencers themselves that are moving products,” said Bucher. “For this reason, non-traditional marketing through social media influencers has attracted much attention from both marketing teams and the Federal Trade Commission.”
There are companies that host multiple live broadcast events every week, and some have partner programs where streamers become official ambassadors for their games and brands. These partners may have direct access to the development team for information and are usually provided with giveaway items in addition to access to new content to encourage viewership and showcase a game’s newest features. Those looking to emulate this kind of focus on community-based marketing should also take steps to avoid disclosure issues while doing so.
“If you are paying influencers or giving them free products to promote a brand or company, you should also be providing those influencers with clear guidance on when and how they should disclose,” said Bucher, stating that lawyers should write the guidance well enough for fourth graders to understand it. “If you don’t currently have guidance that you provide the influencers you work with, now would be a good time to implement those policies. A procedure for monitoring compliance across all sponsored content is important too.”
According Bucher, disclosure is required when there is a connection between an endorser and the marketer that consumers would not expect, but affects how those consumers evaluate the endorsement or recommendation. This usually occurs when a company pays an individual for an endorsement or provides someone with a free product.
Disclosure can be as simple as including “#ad” or “#sponsored” in a tweet. If it is not provided, both the influencer and the sponsoring company are taking a risk.
“If the Federal Trade Commission or a state agency takes notice, the result could be a legal settlement. The class action bar is starting to take notice too,” said Bucher.
Bucher recommends that if a company realizes that an influencer forgot to provide disclosure that it should either take the post down or add a complaint disclosure to it.
“Remedying mistakes is important,” Bucher continued. “The Federal Trade Commission has made it clear that when companies have robust monitoring programs to make sure influencers are compliant and a system for taking swift action to correct noncompliant content, they can avoid legal repercussions for those mistakes.”
A possible workaround to avoid potential compliance issues is to partner with the streaming platform itself. For example, Twitch has a program called Drops, where in-game items are given to live viewers when a streamer hits certain achievements during a broadcast. The program has worked well for both publishers and livestreamers, and sources said that longtime broadcasters who once had a peak viewership of around 100 people suddenly had audiences numbering in the thousands, with those viewers converting to players when they redeem their rewards. Unless companies are coordinating with specific streamers to use Drops or similar features, there wouldn’t be anything to disclose.
Still, Bucher said it’s better to be safe than sorry when it comes to disclosure.
“We wouldn’t fault any company for misstepping, since this is all new and the rules of the road are just emerging,” said Bucher. “Having said that, there have been cases where companies made no disclosure at all, and it’s clear by now that some disclosure is always better than none.”