FTC Announces Settlement Over Influencer Campaign for Xbox One

Posted on September 8, 2015 by Nick Hayes

Thanks to Gonzalo Mon of Kelley Drye & Warren LLC for flagging this story. It’s a really important one for those thinking they can get away with paying for endorsements without telling their public. I hope the pay-for-play blogger companies take note.

“In January 2014, AdAge interviewed me about news reports that Machinima had hired influencers to create videos promoting Microsoft’s Xbox One gaming console and games. In a native advertising campaign, the influencers posted positive reviews, but didn’t disclose that they had been paid to do so. During the interview, we speculated about whether the FTC might take action against the campaign and what the result might be. Now, almost 20 months later, we have the answer. This week, the FTC announced a settlement with Machinima.

According the to the FTC, Machinima, the operator of a popular YouTube network, paid two influential gaming bloggers to create videos promoting the new Xbox One console and three new games, but didn’t require the bloggers to disclose that they were paid for the reviews. The bloggers posted four videos that had more than 1.6 million views. To capitalize on this success, Machinima later recruited and paid more people to upload positive reviews, again without requiring a disclosure. This generated another 300 videos and 30 million views in a five-week period.

If you follow our blog, you can already guess the problem. As Jessica Rich, Director of the FTC’s Bureau of Consumer Protection, said: “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. That’s true whether the endorsement appears in a video or any other media.” Under the proposed settlement, Machinima is required to ensure its influencers clearly disclose when they have been compensated in exchange for their endorsements.”

For Gonzalo’s original story go to:

http://www.jdsupra.com/legalnews/ftc-announces-settlement-over-16317/

And here’s the original AdAge story:

http://adage.com/article/digital/microsoft-machinima-native-youtube-blunder-risks-ftc-ire/291273/

Are brands getting what they intend when they pay their ‘social influencers’?

Posted on July 29, 2015 by Nick Hayes

I don’t have big numbers to share. I have five anecdotal conversations – each with a CMO, or equivalent, of organizations ranging from $35m to just shy of $1bn revenue. Here’s the first. There’ll be more to follow.

This East Coast marketing chief paid $9,000 in total to get five bloggers to write two blog posts and a minimum of four tweets over a four-week period about their supposed adoption of a new tablet accessory. These tweets were then re-published as part of the vendor’s launch invite activities. Each blogger then attended the San Francisco launch earlier this year. That’s approx. $1800 each person.

Was it worth it? The marketing head, who’d identified the bloggers through a ‘social influencer’ database provider, was initially “ok with it, though we’d already known two of the five so we could have approached them direct. We’d have preferred to work with independent bloggers who didn’t need payment, but we were told most did, so we went along with it.”

“It felt a commercial arrangement throughout, with them having all creative control. That was a surprise. It felt like it was all give from us. The upside was that all four turned up at our launch, it wasn’t obvious to anyone else we were paying for them, and we could use their endorsements in our web ads. Financially it wasn’t a bad return for us, but I’ll definitely read their future posts with a lot more skepticism than before. I’ll always wonder if they’ve taken a payment to write about what they have.”

How do these ‘social influencer’ peddlers still exist?

Posted on May 26, 2015 by Nick Hayes

In the B2B sector every in-house Marketing VP, Audience Manager or C-level immediately understands that their organisation’s customers & prospects are primarily influenced offline and through online search. Those that meet their customers know that these people aren’t glued to Hootsuite all day long, picking up whatever’s being posted on Twitter, Facebook et al. They laugh at even the thought of it.

So it still bemuses me there are other self-appointed ‘influencer platforms’ that effortlessly transpose the word ‘influencers’ for ‘social influencers’ so as to promote their own Twitter- or blog-trawler software. I used to wonder how these companies exist – because if they met any of the corporate buyers I meet they’d be laughed out of the office. In perhaps every B2B sector that I know of, ‘social influencers’ are in the very extreme minority – less than five per cent.

Then I came to understand how these platform providers exist. They sell to marketing agencies. And marketing agencies just don’t care about real market influencers – they care about numbers of people who they can outreach to. The game is to continuously ‘top up’ those outreach numbers. Even if those people have only the most tenuous connection to their client’s sales prospects.

So why don’t the in-house managers spot this and call out their marketing agencies? Because too many in-house managers themselves never meet real sales prospects. And so also have no understanding of who they’re really influenced by. This cycle has to stop.

The unbelievable return of EAV (Equivalent Advertising Value) metrics to blogger outreach.

Posted on March 2, 2015 by Nick Hayes

Has marketing forgotten what it learnt twenty years ago? In the 1990s I ran a PR network in Europe. Agencies looked a lot at measurement techniques for the media coverage they were achieving on behalf of their clients. For a short while the industry used an EAV (Equivalent Advertising Value) metric. Some clients liked it but it was always a house built on sand. What was the point of knowing that a particular press clipping on page 87 of a monthly magazine would have cost $190 were someone to have advertised in that spot? The client wasn’t advertising in that spot (for no doubt good reason), the magazine didn’t take ads on that page (so the EAV was an arbitrary value anyway), and the coverage was not exclusively focused on the client (as any ad would have been), so the comparison was impractical from every view. Clients soon saw through it and agencies dropped the metric. Why raise a claim that could be so casually, and easily, shot down. This issue sprang to mind when I was recently reviewing what’s being called ‘blog outreach software’.

I couldn’t be more critical of the current generation of blog outreach software. It’s nothing more than extremely low-end advertising. The bloggers being courted by these software providers are only interested because of the payments they’ll receive when mentioning particular products or services. If the bloggers have any current influence, and there’s no proof they have, that will be immediately lost once they start product placing within their posts. But the thing that most struck me when looking at this software were the metrics they were using to measure the validity of each blogger. ‘Potential impressions’ and ‘estimated impressions value’! Two entirely hypothetical metrics. Have people learn’t nothing in twenty years?

I well remember a marketing director in the 1990s tell a large group of employees that the ultra-expensive Formula 1 sponsorship deal he’d just signed (the firm’s logo was on a car’s wing mirrors) had a potential TV viewership of hundreds of millions of people. He justified the spend by multiplying the likely TV viewing numbers by the length in minutes of each televised race to arrive at that number. As if the tiny wing mirror logo (on two of the twenty cars) would be visible for even 1/100th of each broadcast! In reality it was more like 1/1000th.

So for blogger outreach, why measure each blogger by ‘potential impressions’ and ‘estimated impressions value’? Why is this any more credible in the era of bloggers than it was in the far more stable, and less busy, era of print titles? I look at the (mostly) agencies supposedly using this software and I wonder what story they’re telling their clients.

New Entrants Flooding Marketing Technology Industry

Posted on February 14, 2015 by Nick Hayes

This post from UK Marketing News reports on the astonishing rise in marketing tech vendors over the past few years, up from 100 in 2011 to 1900 this year! It states that influencer marketing is one of the specialist areas behind much of that rise.

http://www.ukmarketingnews.com/new-entrants-flooding-marketing-technology-industry/64/

New Influencer50 White Paper: ‘Where’s the evidence for investing in B2B ‘social influencers’?’

Posted on February 11, 2015 by Nick Hayes

Influencer50 has issued the latest in its series of White Papers this week, WP#19, ‘Where’s the evidence for investing in B2B ‘social influencers’?’. It asks why Heads of Marketing in B2B organisations are still believing that social media outreach will reach those people most influencing their sales prospects, when there’s little to no supporting evidence.

It quotes recent research from the American Marketing Association, Neilsen Online, ad agency RSW/US and Influencer50 itself to question the logic of assuming ‘social influencers’ are a legitimate target audience. It may not be what many of those in marketing roles want to hear right now – but it’s a compelling argument.

Available for download at: http://influencer50.com/library/white-papers/

How will the ‘social influence platforms’ justify their business after this week’s Buyersphere 2015 report?

Posted on January 23, 2015 by Nick Hayes

I’m looking forward to seeing if, and how, the Twitter-trawling ‘social influence platforms’ react to this week’s Buyersphere 2015 report from B2B Marketing & BaseOne. I wrote about it yesterday.

The standout finding was that 50% of all B2B purchasing decision-makers didn’t use social media at all to shape their buying decisions and that just 5% of the >200 respondents said they referred to Twitter at any stage for help in their decision-making process. This was the second-lowest score, just edging out the 4% who used Pinterest.

So when agencies trawl Twitter for the noisiest people on particular subjects, and then sell that information to vendors / brands claiming them to be the key market influencers, perhaps the vendors will start to think again. How can they still back up that claim?

http://www.b2bmarketing.net/resources/buyersphere-report-2015

The Buyer-side Journey

Where Influencer Marketing should be going…but seems to have gone off-track

Tag Archives: Influencer Marketing Platforms

New Entrants Flooding Marketing Technology Industry

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