By Marco Santana
WWR Article Summary (tl;dr) Regulation of the so-called “sponsored social” advertising industry is being called into question after the FTC’s recent reprimand of Warner Brothers.
It may appear that YouTube user PewDiePie’s love for playing Warner Brothers’ “Middle Earth: Shadow of Mordor” video game was genuine and innocuous — but the federal government says the YouTube star was paid for his endorsement of the game.
A recent Federal Trade Commission scolding of Warner Brothers has put the spotlight on celebrity endorsers on YouTube, including the popular PewDiePie, who has more than 47 million subscribers. It also opened the door to more-frequent regulation of the so-called “sponsored social” advertising industry.
The Federal Trade Commission said in July that companies that hire Internet celebrities who produce sponsored content must reveal that arrangement clearly. One local entrepreneur in the space says it’s about time.
“I’m happy to see that the Federal Trade Commission is getting more aggressive and more vocal and going after big brands and well-known names,” said Ted Murphy, whose Orlando company Izea serves as a platform for celebrities to get paid for advertising brands on social media. “I don’t think the majority of people have taken that seriously.”
Aside from Winter Park’s Izea, which has been a leader in sponsored social content, the region also plays home to several companies that create social-media content for others.
Chatter Buzz runs social-media accounts for clients. Another firm — Purple, Rock, Scissors — creates videos and other content using platforms such as Facebook 360 for companies to share on their websites and platforms. But Chatter Buzz and Purple Rock have clear agreements with customers about how the content will be used.
Warner Brothers, on the other hand, was more subtle about their advertisements, the FTC said.