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FTC continues its influencer marketing crackdown with Machinima order

Second release in less than a week indicates the agency wants to keep up the pressure on marketers to play by disclosure rules.

Greg Sterling on March 17, 2016 at 3:08 pm

Last September, the FTC settled charges against YouTube-based gaming network Machinima over failure to disclose payments to YouTube “influencers” surrounding an Xbox promotion. Today, the agency announced its final consent order in the case.

This marks the second announcement this week in connection with a settlement surrounding native ads that did not carry proper disclosures and thus were considered deceptive by the FTC. The other involved fashion retailer Lord & Taylor and Instagram influencer marketing.

In the Machinima case, the company paid two YouTube gaming personalities between $15,000 and $30,000 to produce videos promoting Xbox One and specific games. The videos received hundreds of thousands of views on YouTube. The payments or the promotional nature of the videos were not disclosed to viewers.

Like the Lord & Taylor settlement, the Machinima settlement prohibits the company from doing something similar in the future — paying influencers without corresponding disclosures about the nature of the endorsements. It also requires the company within 90 days to follow up with any payee-influencers to ensure that the required disclosures are made and present.

With these two releases, the FTC is clearly sending a message that more enforcement actions are on the way for any native advertisers or influencer campaigns that are not sufficiently identified as ads or sponsored content.

For more information on how to comply with FTC guidelines surrounding native ads and sponsored content, check out the agency’s Native Advertising: A Guide for Business.