Social Media Influencers and Non-Traditional Marketing: Legal Pitfalls and Loopholes

[Music] hi there oh that's a little loud my name's will bucher and today i'm going to be speaking with you guys about social media influencers in non-traditional marketing specifically i'm going to talk about how you can promote your game or promote your personal image as an influencer while also complying with the law so before i do that i'll give you a very brief introduction about myself i work at a law firm called deva voice in plympton and what i do is what we call ip litigation that's a fancy word for i deal with companies who are already in disputes that means they're arguing if another company about copyright or trademark and increasingly those disputes are with the ftc that's the federal trade commission and they're the entity that's responsible for deciding when a social media post needs a disclosure and what that disclosure

should look like so today when i talk about social media influencers and non-traditional marketing i want to be clear what i'm talking about i'm talking about a lot of things i'm talking about your grandmother's yelp review and i'm talking about drake streaming fortnite and everywhere in between in today's presentation we're going to go through some specific examples of platforms but the tools i'm going to give you today don't care about what platform you're on and should apply to platforms in the future i'm going to try today to make sure i just talk about risk lawyers like to say you have to do x or you can't do x and to the extent i can what i'm going to try and do is identify high risk practices that you might be tempted to engage in and then give you some lower risk alternatives that might accomplish the exact same marketing goal while reducing the risk that the ftc calls you

and then you would eventually have to call me today's presentation is going to be limited to u.s federal law and that's for a couple reasons the first reason is i know you guys come from all over the country and all over the world and i want to make sure the tools i give you today are going to be applicable to what you do and the other reason is quite frankly right now the ftc is the major enforcement entity in the united states and so that's the most relevant in terms of figuring out what your risks are and how to avoid them so there's gonna be three parts to my presentation the first thing i'm going to talk about is when you need a disclosure when you have to do anything at all every post on social media doesn't need a disclosure or a disclaimer and we're going to talk about what posts do and what don't and in the second part of the presentation we're going to talk about what those disclosures look like how do you let people know that there's a connection between you and the influencer and then the third part of today's presentation we're going to talk about what you do when you mess up because a fact of life is your

influencers aren't always going to have the disclosures they need to have and so we'll talk about what you do in that situation i want to be clear when i say social media endorsements that i mean both explicit and implicit endorsements we kind of know what an explicit endorsement is right that's someone creating a video and putting it online and saying this is the best game i've played in 12 months but we're also talking about implicit instruments think about the esports player who wears their hyperx headphones i already said this covers any person from your grandmother to drake um it's about any product or service we'll be talking about games today for an obvious reason but to the extent your company also is in other industries you're also creating movies you're in other spaces these rules apply there too okay so let's start with the core rule so the ftc has thousands of pages of guidance but it all really comes from this guy here on the board that i put up in four colors it's this rule it's if there's a

connection between an endorser and the marketer that consumers would not expect and it would affect how consumers evaluate the endorsement that connection should be fully disclosed the first three colors up there the yellow the blue and the red when all three of those are met then you have what's called a material connection that'll be the first part of my presentation what a material connection means you'll hear me say it again and again in the presentation but that's just any connection that needs to be disclosed the green up there is then what you have to do if there's a material connection which is fully disclosed and we'll talk about how to do that and then i already told you in the last part of this presentation we'll get into how to make sure your influencers are doing their job or as an influencer what to do if you mess up if you take nothing else away from today's presentation here's what today means for you if you're a social media influencer and you create content related to a game that has either paid you to create that content or if it's otherwise established a

connection with you you need to include a disclosure you need to let your followers know that you have that connection on the flip side if you're a publisher or you're a game developer and you hire an influencer to create content for your game you need to give your influencer guidance on how to properly disclose and you need to make sure they're doing it you need to monitor so let's start with a real world example this is syndicate i'm not sure i'm going to do the voice correctly but i'll give it a try he tweets out bra i've won like 8 dollars worth of cs go skins today on cs go lotto i can't even believe it now syndicate's still under investigation for some potential gambling violations but he's already gotten in trouble for this tweet and it wasn't because the tweet was endorsing gambling although that's another problem the problem with this tweet really is that last phrase there i can't

even believe it and the problem is it's a little difficult to believe he couldn't believe it because he was running the site right he went on his own site he won a bunch of money what a surprise and so the ftc came after him and entered into a settlement with him because he didn't disclose that he was connected to the site that he was the owner of the site so one situation in which you'll have one of those material connections is you own the company or you make the game right i mean that's real simple but that if you have those connections that needs to be clear to your users okay throughout today's presentation i'm going to be going through a hypothetical so that we can cover lots of different situations you might encounter and in my hypothetical we have a game developer shady corp and i call them that because as you'll see some of the things they do are a little shady to make it simple they're going to have released a game called drawn out chess this is a classic game of chess but they have skins for it that's how they monetize they sell what they call chess sets and

that's how they make their money it's for pc and mobile and they've just launched their game and they're going to engage in a marketing campaign and we're going to talk about different practices they engage in and which require disclosure and which don't okay so here's what shady corp does the first thing they do is they go on twitter on their official corporate twitter account and they post about the game can they do that the answer is yeah they can do that and they don't need a disclosure that might seem like it's contradictory with what i just put up on the board about syndicate because he went and posted about his company and he needed disclosure the difference is this is an official corporate account and at least in my hypothetical i'm assuming that's an account that has had lots of tweets about the company that has a handle that is clearly from the company and so users are going to understand that the game developer is sending out this tweet and as long as consumers would already understand that you don't need a disclosure

so in our next example the ceo then goes home that day and he posts on his youtube channel a video of him playing the game does he need a disclosure maybe and i say maybe because it depends what his channel looks like if he just happens to really be into strategy games and has a channel of all sorts of games from all sorts of developers and he uses an alias that doesn't make it clear that he's the ceo of this company then yeah he's got to let his followers know that he's the ceo of shadycorp when he posts that video but if it's clear from his youtube channel if it's like the twitter account where it's clear that it's from the company then he doesn't need a disclosure because consumers already know if we go back to this colorful slide here right that blue part that consumers wouldn't expect so if consumers already expect there's a connection between you and the game or the company you're tweeting about you don't have to worry you're done you don't need to worry about any of the rest of these rules

okay so what about the third thing here this is something obviously a lot of games do you release your game and you send it to some websites that review games professional critics do professional critics have to have a disclosure the answer there is no and it's for the same reason is that consumers assume that when a critic reviews a product whether it's a movie critic or a book critic or a video game critic they are receiving that product for free and because consumers expect that those websites don't have to post disclosures in practice they often do but they don't have to but what about doing something very similar sending free copies of your game to a bunch of twitch streamers the answer there is yes those streamers have to disclose that they got the game for free or i shouldn't say have to i said i was going to try and avoid saying you had to do things so i'd say there's a risk that the ftc will come knocking if those streamers don't include a disclosure we'll talk later about what that

disclosure has to look like okay so our takeaways are that social media posts clearly from a product's creator don't need a disclosure the second takeaway is receiving a free copy of a game or anything else of value creates a material connection that needs to be disclosed third take away is professional critics don't need a disclosure but then the exception to the exception is the ftc currently doesn't consider youtubers or twitch streamers to be professional critics even if they're being critics in their game stream okay so we're going to continue our hypothetical now it's maybe a couple weeks after the release of the game the games had decent sales but the reviews in the app store and on steam aren't doing that well so shady corp decides they're going to create an in-game prompt to ask their users to review their game we see this all the time in mobile less often on pc and console although it's there too

and their marketing team comes to them with three proposals for potential prompts and i want to walk through what the risks in these different props might prompts might be and we'll go with what at the end what i think is probably the best strategy so the first prompt that they propose inserting their game is this one on the right here it says take a moment to review drawn out chess you unlock the exclusive ninja chess set and it gives two options one is no i don't want my free skins i don't want my free chest set and the other is yeah i love ninjas let's do this and if the user clicks yes then they go to the app store and they also get the free skin now because of the ecosystem the game developer doesn't know if they actually rated it once they got to the app store but it directed them there and if they say no they just keep playing the game so i already told you receiving a free game creates a material connection what about receiving a free item in a game that you can't transfer anywhere else

well right now the ftc's opinion is that creates a material connection for those of you in the room who sometimes deal with gambling law and how to make sure you're not violating gambling law this is different it's a different outcome here normally in the context of games we don't consider an in-game item to be something of value unless you can sell it on some other marketplace but for the purposes of social media influencer disclosures giving your player anything including a skin that doesn't affect their gameplay counts as something of value so if shady corp decided to use this prompt they would have to make sure or at least attempt to get their consumers to disclose that they got a free prompt within their review in practice that's going to be really hard there are ways you could do it but it's difficult and expensive and difficult to monitor so i don't like this as a method of trying to get more people to review your game

not because you can't do it because it's really difficult to do and inevitably you're going to have consumers who don't disclose that they got the free skin so let's talk about some other examples you might use to increase the rating of your game or get more reviews that are lower risk so first look at the example on the left here it says enjoying drawn out chess and this time it's giving the player three options first option is yes right it now that option will take them to the app store like in the previous example second option is no send feedback what this option does is it pulls up a prompt within the game that the user can then write feedback and maybe as a developer you decide to read it maybe you don't but for the purposes of reviews what you're doing is you're directing the user away from the app store and then the third option is just to smash you do neither this is what we call divergent prompting the attempt here is to filter users who don't like your

game away from the review stores and users who do like your game there i would call this practice moderate risk this is probably better than giving your player a free in-game item from the purpose purpose of enforcement but it's still really and if you're gonna do something like this the big piece of advice i have for you is make sure you're being clear with your players what button does what so there are games where they use this except for there aren't three buttons there's just a rate the game and it gives the user five stars and when that user rates the game five stars it takes them to the app store but when they rate it one two three or four stars it keeps them within the game ecosystem doing that is an area that i think is very likely to be enforced in the near future so if you're going to go with this strategy on the left here divergent prompting at least make clear to your players what's going on so that if they hate the game they can at least say yes right it now

because they know where that button takes them but as you might have guessed the solution i like best for trying to get your users to have more reviews and better reviews is this third one on the right here so in our hypothetical this says a five game hot streak just won five chess games in a row take a moment to rate drawn out chess before you get back to dominating and then it gives the user the classic two options yeah review the game and no i don't want to review the game what this prompt is doing is we're not trying to filter out users what we're doing is we're displaying the prompt at a time when the users are likely enjoying their experience my guess is that if somebody just won five games in a row in a matchmaking system where you know it's 50 50 odds basically they're probably feeling pretty good and so when these users go to the app store they'll probably give it higher ratings but you're not being deceptive here you're not bribing your user into giving

you a better rating you're not trying to say some users can't rank your game and not you're just putting the prompt at a time that users are likely enjoying the experience and you can work with your analytics people whether they're in-house or outside of the game to figure out what's the moment in your game when players are really enjoying it and then just cue up that classic would you like to review this app now prompt then i think that's the lowest risk strategy if you're looking for a way to increase reviews within the app store environment okay so our takeaways giving compensation to users for reviewing your game even in-game aesthetic items that cannot be traded creates one of those material connections so you're going to need a disclosure or it's going to be risky to not have a disclosure second takeaway is the ftc hasn't yet enforced against divergent prompting but i would be careful if you do it if you do it make sure you're being upfront with your players about what's going on and then the third point is creative

timing of when you schedule a please review my app prompt within your game is probably the lowest risk alternative to boost your reviews without the ftc coming and giving you a call okay so we've talked about when you needed disclosure now what i want to talk about is what those disclosures look like so we're going to continue our hypothetical but now we're going to introduce tina the twitch streamer who is someone that shadycorp games has hired to promote their game and this is a hypothetical tweet she sends out it says i love my new pirate chess set in drawn out chess i'll be streaming it here and gives a link and then she has some hashtags she says r she's a pirate okay hashtag old school gamer hashtag partner and hashtag streaming so if it wasn't clear and this is purposefully not a clear slide the attempted disclosure is hashtag

partner what tina is saying is she's partnered with the game and she's at least attempting to let her audience know that and she includes this hashtag so let's talk about what's okay and what's wrong here so first thing that i want to make clear is there's no magic sentence of legalese that you should say when you're making a disclosure you can disclose in any format and yes that includes hashtags so there's no rule that says your disclosure can't be in a hashtag problem here is that partner's a little ambiguous and when the ftc has looked at cases like this they've said we don't think your audience really knows what partner is and they've given some suggestions for better hashtags you might use they're a little bit clearer so the ftc's favorite hashtag is hashtag ad pound symbol ad it's really short it only takes up three characters and it's very clear what's going on

marketing teams don't always like hashtag ads so much it seems a little hard right it's a little in your face sort of breaks the narrative that the influencer is trying to create that they actually support the product so some other options are hashtag sponsored hashtag the company's name with an underscore partner or the company's name with an underscore ambassador they don't like partner but if you put your company's name in front of it and then an underscore and then partner they like that and they call that disclosure sufficient which means be very low risk the other problem with this hypothetical is that the hashtag is in the middle of a bunch of hashtags at the end what the ftc refers to as being lost in a sea of hashtags and the thought is that when a user sees this they'll probably read the text and they might just read none of the hashtags because there's so many of them so if you're going to make a disclosure through a hashtag

put your hashtag at the front and ideally don't have more than two other hashtags after it more hashtags you have the greater risk you have so our takeaways are disclosures can take many forms even hashtags second takeaway here is the ftc has only officially approved a limited number of hashtags those are hashtag ad sponsored hashtag your company's name partner and hashtag your company's name underscore ambassador that doesn't mean there aren't others that work that just means that right now there have been cases where they've said those all definitely work so if you use those very low risk on the flip side the ftc has a bunch of hashtags they really don't like and so i wouldn't use any of these because then you're almost tempting the ftc to come after you those hashtags are hashtag sp spawn hashtag collab hashtag partner hashtag consultant hashtag ambassador

and this one which i think is a little surprising thank you underscore and then the company's name the reason they don't like that last one is their thought is maybe the influencer bought the game themselves and they just really liked the game you know they've been playing surviving mars all weekend and they just really want to thank paradox even though they don't have a relationship with them and the final takeaway here is that you have to have your disclosures not in a sea of hashtags so if you're going to use a hashtag ideally not more than three hashtags and make it the first hashtag in the list okay so now we're going to go in it back to a real world example here this is pewdiepie this is the actual youtube page you get to for his video that was sponsored by warner brothers and when you go to pewdiepie's page this is what it looks like and like most youtube videos below it there's a show more button which brings

up this incredibly readable block of text within that block of text there's a disclosure it says this video was sponsored by warner brother it's misspelled but it's a disclosure and at the beginning of his video um he says i had the opportunity to check out the demo of this game at gamescom the ftc came after warner brothers for not giving sufficient advice on how to disclose here and what was their issue their big issue here was that users had to click a button in order to see the disclosure it's what they call below the fold and quite frankly they're right most users don't click the see more button when they go to a youtube page age and look at the description this also applies in other contacts context think about something like instagram where if you have too many sentences it gets cut off that means for those platforms your disclosure needs to be in those first four sentences so users

don't have to click a button it also means it's going to be very risky if you try and have your disclosures and say your terms of use and just hope your users go and click to read it they need to be visible they need to be above the fold other thing i want to point out about this case is allegedly i don't know how much it was actually paid but according to the ftc pewdiepie was paid about twenty thousand dollars for this video and even though they complained about it in the final settlement there was no mention of disclosure for the amount of money and we've consistently seen that in future cases going forward so if you were worried that you were paying your influencer a lot of money or giving them a lot of free product and that they were going to have to disclose that and that might cause some backlash in your community or your competitors might start finding out what your marketing spend was don't worry you never have to say how much you paid someone you have to make it clear that it's sponsored that you paid them but you never have to tell them how much so i've put up in case you want to look

at it i don't think it's particularly readable but basically what that paragraph says is what i talked about for the above the fold don't make your users click a button to go see your disclosure second bullet up there is what i just said you don't worry you don't have to disclose the amount you have paid your influencers if you go and hire them okay so we're going to go back to our hypothetical now and now tina the twitch streamer is actually running a twitch stream and i want to talk about what that disclosure looks like on twitch it's a little easier to think about in the context of something written because you have time to prepare it and as a developer studio you can actually send your influencer the exact text you want them to use of course in the context of twitch is live the user's streaming and so let's talk about how you would make that disclosure so the first thing is the lowest risk

risk practice is that in the beginning of any video whether that's a fixed length video like youtube or that's a twitch stream at the very beginning you want to have both a text-based and an audible disclosure at least if your video video has audible content in addition to that first disclosure if you have a video that isn't fixed length think about a live stream you have two options you can either have periodic disclosures or you can have constant disclosures sort of self-explanatory although let's talk about a periodic disclosure means every once in a while you have a disclosure and you're probably thinking right now well how often is that man that's a great question been waiting for years for the ftc to tell us and they still haven't so i have two answers for you first is the complicated but probably the best answer

which is every time you have a churn of more than 50 that means you're at a point where most of the people watching your stream weren't watching it the last time you disclosed you should disclose again now in practice that's really difficult to figure out right you don't necessarily have the live analytics and even if you do have historical analytics they might change from time to time so the short answer i'm going to give you is once an hour that answer may change in the future but based on what i've seen and based on my discussions in the job that i have i think once an hour is something i would be comfortable defending i think that's very low risk another strategy i have when you're working with influencers is once an hour can seem sort of rote right in theory you can have a timer and they can disclose every hour but sometimes a better strategy is if they're playing a game that takes place in rounds think about fortnite or pub g or

hearthstone or starcraft if they're playing a game like that have them disclose every round or if the rounds are short every couple rounds so that they're disclosing at least once an hour for the moment i think that's the lowest risk practice and that may change in the future but that would be my recommendation for the moment now i said there were two options there was periodic and constant constant doesn't mean your influencer is just there on the stream constantly saying i got this game for free i got this game for free i got this game for free what that means is that after the initial audible disclosure there's a block of text that's always on the screen marketers tend not to like this in the game industry it's really frustrating because it can obscure the game itself so generally periodic disclosures are better but where constant disclosures work well is when you as a company are working with an influencer who just can't remember to disclose we know those people right they're not being malicious they just can't remember

and if you're working with them and they just keep forgetting maybe think about putting a block of text on the screen either above or below them another trick with the constant disclosures that's really frustrating is if those disclosures are blocked by an ad then no one's going to see them so it can be complicated in that maybe on youtube it's fine but then you upload it to another platform and the ads appear below the video and it's obscured but again if you really have someone who can't remember think about that as a strategy so our takeaways are disclosures and videos should appear at the beginning of the video including both an audible and a text-based disclosure is the lowest risk practice if a video is part of a stream there needs to be either periodic or constant disclosures ftc hasn't told us what periodic means

if you instead choose to use a constant disclosure that would be a text disclaimer at the top or bottom but remember make sure your ads aren't covering it up okay so i told you there'd be three parts to today's presentation i've talked to you about when you needed disclosure and about how that disclosure should look so now let's talk about what happens a lot when you mess up or one of your influencers that you're hiring forgets to include the disclosure nowadays it's not uncommon to work with 500 influencers and one of them is probably not going to do their job so what i've put up on the screen here is a real life case this is actually one of the earliest ftc enforcement cases and it was microsoft's promotion of the xbox one and so what microsoft did is they went and they hired star com mediavest to run a marketing campaign and they in turn hired machinima to

recruit some influencers to promote the xbox one and then machinima paid influencers to post videos about the xbox one and some of those influencers didn't include a disclosure and the ftc did an investigation but microsoft didn't end up getting in trouble so let's talk about why you might be tempted to think they didn't get in trouble because they're all the way up the chain and that's not the right answer you are welcome to delegate your marketing and delegate this responsibility but that isn't a get out of jail free card it's your obligation as the company that initiates the spent so microsoft in this example to make sure those influencers receive the guidelines and actually put them up but microsoft didn't get in trouble here for two reasons one they had a robust compliance program where they sent each influencer guidelines on how they needed to disclose

and not only did they do that they monitored the influencers and they noticed that some weren't disclosing and once they noticed somewhere disclosing they did a broader campaign figured out all the influencers who hadn't disclosed and then they did the really important thing here they made them fix it they went to their influencers and said either take down the video or out of disclosure so you're not always going to get in trouble here as a company just because you have one influencer who makes a mistake the key is that there should be some monitoring of what your influences are doing and then correcting the issues when you find them i also like to point out monitoring doesn't mean you have to look at every single post you can do that and that's probably the lowest risk strategy but you don't have to particularly if you have an ongoing influencer who's you know creating content all the time maybe once a week maybe once or every two weeks check in and then if you see a problem with an influencer go back and look at all the rest of your post

so our takeaways here are regular robust monitoring is a best practice if a non-compliant post or video is identified that should be corrected either by adding the correct disclosure or taking that content down you're welcome to delegate marketing or monitoring but that delegation is neither a defense nor an excuse right you don't have to do it but if you do do it you still have to watch out for yourself and finally i've put up an ftc recommendation here that i don't know how viable it is in practice when you're working with influencers in the real world but is at least a creative recommendation from the ftc and their advice is don't pay your influencers until you've reviewed their post and if their posts don't have the correct disclosure then they don't get paid okay that's probably a really good way to make sure your influencers do their job and include inaccurate disclosure not sure how well it would work in the context of actually working with

influencers but it's a strategy to consider and if you've had an influencer who keeps forgetting to include a disclosure maybe a strategy you want to think about in terms of how do i get this particular influencer who i've had problems with to keep promoting my game but include that disclosure i've asked them to so let's take a look about what that looks like in practice because it's sort of easy in the abstract to think oh yeah i monitor and when i see something wrong i correct it but sometimes you get posts that yeah they're a little on the edge so we're going back to our hypothetical here but we're going to flash forward another two or three months so if you remember from earlier in our presentation tino was paid some money to send out some tweets to do some twitch streams to create some youtube videos she was paid that money over a two-week period she fulfilled her contract she's done and because shady corp has really good monitoring they notice four months later she sends out this instagram

right and so i know the text a little small what it says at the bottom there is look like someone looks like someone just leaked the pawn skin and drawn out chess's upcoming russian themed chess set so what's tina doing here she's making a political commentary right and so your monitor comes to you and here she is like man i don't know what to do because we paid her but that was like three or four months ago is she's still an influencer for us this this post is about our game but it's not really about our game do we have to tell her she has to go put up a disclosure so why don't we break down those rules so first the simple one everything i've talked about today applies to what we call commercial speech that's a lot of things but one thing it's definitely not is this post so unless you have a contractual commitment otherwise your influencers are free to post this content and no she doesn't need a

disclosure here but i think actually the harder question is what do we do with the fact that she was paid three months ago and isn't technically working for you now but she's still talking about your game let's say this was just like the her previous tweet clearly about the game do we need a disclosure then i think the answer there is a little just surprising so the first answer is if you give someone a free copy of your game according to the ftc they have to post a disclosure about that game forever it means they're still playing your game four years from now in theory they still need to say hey i just want to let you know i got a free copy of this game that's really onerous right in practice i'll be curious to see if the ftc actually goes after those users that far in the future but at least in theory that's a practice

that could get you in trouble to call it a moderate risk practice but what about someone like tina who is paid to run a promotion over two weeks well tina only has to disclose for the period of her promotion and once she's fulfilled her contractual obligation she no longer has to disclose this might not seem to make a lot of sense because maybe tina was paid a lot more money than the person who got the game for free the way you can get around this is rather than just send free copies of your game to a bunch of influencers to the extent you can say you're able to do this and i get that in the process of marketing it can be difficult but if you're able to instead enter in a contract with them and say i'll give you 60 or whatever the price of your game is to do one twitch screen stream of my game and then once that contract's fulfilled they don't have to keep disclosing which is going to be a lot easier for

them and a lot easier for you as a game developer monitoring what your influencers do final thing i wanted to bring up with this tweet is you might be tempted when you're hiring influencers to put restraints on what they can do even once the promotion's done right this doesn't seem crazy i totally get it right you have an influencer and you want to say to him look if you say a racial slur in the next year i want my money back because that's not my brand and that's not how i want to promote my brand it's worth thinking about when you're drafting your contracts what sort of restraints do you want to put on the conduct of your influencers for the future but i told you that when somebody has a contract they only have to disclose for the length of that contract and that means if you're putting restrictions on your influencers that go far beyond the promotional period they have to keep disclosing when they play your game for that whole period

so there's a little give and take here right you gain more control but then you also have more obligations in terms of monitoring so something to think about when you're working with influencers and recruiting them okay so our takeaways here are there's no official guidance on how long after an event establishes a material connection but based on those thousands of pages and all those settlements the period's likely indefinite if the influencer receives the game or other product for free with no corresponding obligation but on the flip side the period is likely limited to the length of the contractor obligation if one is imposed very low risk for companies uh once for posts featuring the game after the contractual term somewhat more risk for the influencers but at the moment we haven't seen any actions enforcement actions like that and there's absolutely no risk for political speech if you're an influencer in the room and you're making political commentary you can say whatever you want and you don't have to worry about disclosures

and the final point restrictions on content in social media beyond the promotional period may be useful to preserve your brand image but keep in mind if you impose them then you have to keep monitoring and your influencer has to keep disclosing for whatever the length of that contract is so that's my presentation that's when you need to disclose what they should look like and how to monitor i've put my contact info up on the board and for now i'm happy to take any questions you may have hello just have a quick question uh how does this change for free to play games if there's no direct monetary compensation to say a partner program that we're running and we give them in-game items as compensation um is that different uh than giving them direct money essentially sure so i would need to know more about

what the program itself looks like but generally giving someone in-game items to promote your game triggers all these obligations just as if you've given them cash right i i think that's a surprising result and hopefully i can do my job better and convince the ftc that that's not the right result but for now they're treated just like somebody who paid cash thanks great talk just a quick question we were talking about the ftc here so what about companies which are based outside the us and let's say even the influencer is a let's say a british guy or girl and then uh you know we sell the game on steam and clearly twitter is based in the us so how does that work sure so that's a great question if your game is sold in the united states and the influences you're hiring are creating content that's most likely going to be viewed in the united states then these rules apply as a practical

matter the ftc is less likely to come after you because it'd be a pain for them right they'd have to go abroad there's a whole bunch of legal rules they'd have to follow so you're probably a little bit safer but formally these same rules apply great um well if i don't have any more oh sorry go for it uh so i have a interesting situation that came up recently in the past one of my influencers paid cash and bought their own copy of the game but i gave them copies uh for them to distribute for free to their streamers um even though they weren't streaming the copy that i bought them are they forever now uh have to disclose or do they only have to disclose in which in the stream in which they gave away the free copies i think it would be very very low risk to continue forward without disclosing i think that's a great example of how do we work within the rules to

not make our influencers have this weight that's dragging them down forever if they bought the game within the stream where they're giving them out they have to disclose they got the copies of those games from the game developer from you but as long as it discloses you within that stream and aren't giving out free copies in the future that's enough and i'd be very comfortable of that situation thank you hi thanks great talk i have maybe a tangent maybe this is a better offline discussion but i'm curious about the relationship between streamers in particular and the platforms themselves uh incentivization of using certain types of features that are known to keep engagement and the financial relationship between platforms like twitch and streamers uh is there any additional required disclosure from the platform context about the financial relationship between people in that platform sure no that's an interesting question i think the short answer is no so at least in the near future

ftc enforcement is going to be focused on the influencers and on the companies that paid them initially and platforms can kind of sit on the sidelines although in practice they are developing tools right like so youtube now has a tool where if some of the products in your video are sponsored it will display a you know little disclosure about that and so you can use those tools sometimes those tools won't necessarily perfectly line up with what i just talked about here but i don't think the platforms themselves have an obligation i you talked about the idea of creating contracts with streamers or influencers and saying instead of giving you x game for free let's give you uh x amount of money that would then free up some of that long-term obligation for disclosure should streamers be thinking about requesting those kinds of contracts when looking at influencing games absolutely to the extent they're able to so i think these you know as we saw in the presentation

the real world examples of both the ftc coming after the influencer and the company themselves i realize in practice it can be hard because sometimes someone just sends you a free copy of the game and it's you know you send them an email and say hey could you you know send me some money instead and i'll just buy the copy and they never respond so i get that it can be difficult in practice but the extent you can do that yeah that would be great and definitely reduce your risk nate blair high res studios two questions one probably pretty straightforward and easy one tiny bit more maybe employees that are not paid to do the streaming they are doing i presume you would advise that they acknowledge the fact their employee in the streams they are doing thoughts on that second thought second question being what about your esports players who they're playing in your leagues you're not specifically paying them to stream but nevertheless they do have connections back to the league back to the teams etc

sure so i think you're right the first question is easy on the employees that's the ceo of the youtube channel i talked about the employees need to disclose if it's not already clear from the content they're creating that they're an employee which often it's not there are sometimes it is but that needs to be made clear in some manner to the esports question i think that goes we'll go all the way back to this uh rule here that i put up in a bunch of colors so i think the answer here is comes down to the blue do consumers understand that the esports athletes are being paid to promote the product i think the answer is probably yes at least within the official setting of the game environment so when you go to a tournament and you see them playing on certain computers or using certain headphones my guess is most consumers understand that that's sponsored right that they're paid to do that and so there probably doesn't need to be a disclosure there but in the short term maybe particularly as esports grows and it becomes more established and these norms get figured out maybe it would be good

to have a disclosure thanks great talk thank you um there was um there's discussion with cryptocurrencies and making contracts in those exchanges um how does the fc ftc view the the contract within a cryptocurrency in in the discussion of creating a disclosure because it's not regulated at this point is there any more risk when dealing with a contract inside of the cryptocurrency uh so two i just want to clarify your question are you talking about paying influencers of cryptocurrency are you talking about a contract that is structured within cryptocurrencies so that the payment's only delivered once they fulfill some obligation the latter the latter okay there's no additional risk because you're using cryptocurrency doesn't mean you're free of risk but there's no reason that should change the risk profile for anything you're doing

okay great thank you hey do the disclosure um requirements also encapsulate media channels that aren't personal brands so for example if it's a media channel it's just like a passion page or something like that do we have to disclose that we were paid to do that advertisement if it's not like our personal brand promoting it just like a news channel yes there's there's a platform agnostic so to speak that's a big word for we don't care what you're on and we don't care what you do and you know i think this slide here right you know any person explicit or implicit product or service right i mean pretty broad scope into which this applies so if you're talking about just like a blog and it's maybe it's not your personal blog or maybe it's a news website or something absolutely an example where we see that

come up is sponsored content on um think about like polygon it'll be like from our sponsors right they make clear that this is actually an ad that's like an article but it was sponsored and you have to make clear that you know that article was paid for that promotion was paid for okay so this also is tried and true for bartering tangible goods as well like if say you were to send a female a t-shirt and she posts about your brand even though you didn't pay her like you said you know you gave her something for free she would have to um disclose that she somehow partnered with you okay cool thanks okay um well thank you guys so much uh if there are no other questions i'll let you guys go but i do want to remind you to please fill out the evaluations i know they're sort of a pain for you to fill out but they're great for us helps us learn what you guys enjoyed what you didn't and how next year i can be even better so thank

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