One year ago, the Federal Trade Commission (FTC) hosted a workshop titled "Protecting Kids from Stealth Advertising in Digital Media" to address the merging of advertising and content in the digital realm and its impact on children and teenagers.
The event opened with a “show and tell” of children’s advertising that blurs the lines between content and marketing, such as:
- Influencer “let’s play”, unboxing, or tutorial videos featuring sponsored products;
- Live streams by influencers playing a game featuring sponsored products;
- Branded gaming apps or websites created by advertisers (i.e., a Candy Crush Saga look-alike game sponsored by a candy company);
- Brands embedded in immersive gaming environments, such as “Walmart Land” in Roblox; and
- Clickable ads within online games that appear to be part of the gaming experience.
The FTC asserted that these examples of “stealth advertising” can lead to impulsive purchases (often on mom’s and dad’s credit card), privacy violations, and a disproportionate influence on younger populations.
Fast forward to today and the FTC has released new staff recommendations for advertisers, content creators, platforms, and other stakeholders to address these blurred lines and reduce confusion among consumers – especially kids.
Social media influencers and content creators should be aware of these recommendations and adopt these practices to ensure transparent and FTC-compliant advertising.
FTC Warns Influencers & Creators: “Inaction Is Not an Option”
In September 2023, the FTC released new recommendations for advertisers, content creators, platforms, and other stakeholders to “reduce the likelihood of young consumers being deceived or otherwise harmed.”
The FTC stated that implementing any one recommendation alone is not sufficient. “To address the issue of blurred advertising to kids, marketers and others should consider the real-world effects of their marketing techniques and implement all the relevant FTC staff recommendations set forth below in a manner that protects children.”
The FTC also reminded marketers and content creators that “blurred advertising targeting children comes with inherent risk, and companies can be held liable for any resulting deception or unfairness, pursuant to Section 5 of the FTC Act.”
Avoid FTC Regulatory Action in Multimedia & Influencer Marketing
The FTC’s staff guidance on how to avoid regulatory action highlights five recommendations:
- Do Not Blur Advertising: Maintain a clear separation between entertainment/educational content and advertising. This can be achieved through formatting techniques, visual cues, and verbal signals that clearly indicate the presence of an ad. For example, using a black or white screen before and after the advertising message, distinct backdrops behind the advertising message, and interrupting background music or switching hosts can help distinguish ads from content.
- Prominent Just-in-time Disclosures: When using embedded advertising in content aimed at children, provide timely, prominent, and clear disclosures both verbally and in writing. These disclosures should appear at the introduction of the product and at reasonable intervals throughout the content. The substance of disclosures should include an explanation of the sponsor's intent.
- Use Easy-to-Understand Icons: Consider creating and using easy-to-understand and highly visible icons that convey that money or free items were provided to the content creator for advertising a product. Icons should be used in conjunction with disclosures and consumer education efforts to ensure children understand their meaning.
- Educate Children and Parents: Education plays a critical role in helping children recognize and evaluate advertising, especially in the digital space. All stakeholders should focus on educating children, parents, and educators about how digital advertising works and how to identify and evaluate it. Encouraging media proficiency and digital citizenship, including ad literacy, is vital for children's development.
- Platform Controls and Policies: Platforms should consider implementing policies that require content creators to self-identify content containing advertising. They should also provide parental controls that allow parents to limit or block their children from viewing such content. These controls can give parents more control over their children's exposure to blurred advertising.