As a Senior Vice President at SHIFT Communications, Alan Marcus’ job revolves around the world of advertisements. In a talk he gave for the Ben Bronstein Lecture in Ethics and PR, Marcus gave a very insightful overview on how advertising on social media has changed since new laws requiring clarity of advertising has been installed. Before these laws were put into place, there were many ethical concerns about advertising via celebrities on social media. First of all, without the celebrity actually making it clear that they are sponsored, the consumer cannot know if they are getting an accurate representation of what the celebrity thinks of the product. In addition, another ethical concern was for consumers was celebrities giving dishonest reviews of products in order to appease their sponsors. As a result of these two concerns, the Federal Communications Commission was left with no choice but to regulate how companies could advertise their products using celebrities and their social media accounts.
When a company decides to use a celebrity’s endorsement over social media in order to advertise their product, they must make sure that the celebrity shows clarity that they are sponsored by the company. Whether it be putting the hashtags #ad or #sponsored, there needs to be clarity. While it sounds nitpicky and trivial, failure to comply with these regulations can be catastrophic to a company. In addition to the fines proposed by the FCC for being unable to provide transparency in advertising, according to Kerry Gwyther of the UK Law Firm TLT Solicitors “Misleading marketing can also lead to a loss of consumer confidence in the brand.” If I were placed in this situation where I was advertising a product using a celebrity’s social media, I would consider it a no brainer to submit to the FCC’s regulations. During Marcus’ lecture, he made the point clear that the losses in sales before and after the regulations were negligible. It makes little sense to risk bad PR by doing something as simple as not having a hashtag at the end of a tweet or at the end of a video.
Another big problem before regulations were put in place for advertising over social media using celebrities was companies hiring popular YouTubers to give their games unwarranted positive reviews. In a well-known case, Warner Bros. paid YouTube celebrities to give their game subjective, positive review without having the celebrity disclose that they were being paid. According to Computer and Internet Lawyer, Warner Bros. “paid each influencer from hundreds to tens of thousands of dollars, gave them a free advance-release version of the game, and told them how to promote it.” As a result of this coming to light, Warner Bros. received a lot of backlash towards them and had many charges brought up by the Federal Trade Commission. Due to this, companies now have their YouTube celebrities disclose whenever they are being paid to advertise a game. With the potential buyer getting a more objective review of the game, they can make a much more informed decision on whether or not they will buy the game. This has an added benefit where companies can no longer get away with making bad games and giving dishonest reviews. They are going to have to make exceptional games in order to get just reviews and higher sales.
In the end, I think that the regulations put in place for companies using notable public figures to advertise their products are both just and helpful. I have been a victim of buying a video game after receiving a glowing endorsement from a YouTube personality and being extremely angered by the subpar game I bought. It is important to revisit these issues in the future and discuss how the regulations are helping consumers make more informed purchases and what can be done in order to completely eliminate deception from companies.
Gwyther, K. (2012, Aug). Make sure your twitter messages don’t fall foul of advertising laws. Caterer & Hotelkeeper, 202, 36. Retrieved from http://ezaccess.libraries.psu.edu/login?url=http://search.proquest.com.ezaccess.libraries.psu.edu/docview/1039547761?accountid=13158
Warner bros. settles FTC charges regarding paid online influencers. (2016). Computer and Internet Lawyer, 33(10), 30-31. Retrieved from http://ezaccess.libraries.psu.edu/login?url=http://search.proquest.com.ezaccess.libraries.psu.edu/docview/1820548882?accountid=13158