You might have heard the controversy with Machinima and the Xbox One campaign. This incident hid the fact that the Xbox division paid youtubers for putting a tag in their video without disclosure. This has become a problem which we’ve discovered time and time again with not only youtubers, but with journalists as well. FTC has now come out to rule that this campaign deceived consumers.
The ruling said:
“A California-based online entertainment network has agreed to settle Federal Trade Commission charges that it engaged in deceptive advertising by paying “influencers” to post YouTube videos endorsing Microsoft’s Xbox One system and several games. The influencers paid by Machinima, Inc., failed to adequately disclose that they were being paid for their seemingly objective opinions, the FTC charged.”
Making it seem that these youtubers objective opinions, when they weren’t. That and the fact that this was not disclosed in any of the videos.
“When people see a product touted online, they have a right to know whether they’re looking at an authentic opinion or a paid marketing pitch,” said Jessica Rich, Director of the Bureau of Consumer Protection. “That’s true whether the endorsement appears in a video or any other media.”
The videos in question were watched over 19 million times in total. That is no small amount for such a campaign. To show how unethical this was, several youtubers got early versions of Xbox One. Not only that, there were a few that even got money for this.
“In the first phase of the marketing campaign, a small group of influencers were given access to pre-release versions of the Xbox One console and video games in order to produce and upload two endorsement videos each. According to the FTC, Machinima paid two of these endorsers $15,000 and $30,000 for producing You Tube videos that garnered 250,000 and 730,000 views, respectively. In a separate phase of the marketing program, Machinima promised to pay a larger group of influencers $1 for every 1,000 video views, up to a total of $25,000. Machinima did not require any of the influencers to disclose they were being paid for their endorsement.”
The vote for this issue from the FTC was 5-0 in favor of deception of the audience. Machinima had the responsibility to disclose this within 90 days of the date of the uploaded video. None of the videos were updated with a disclosure.
What are your thoughts on this ruling?