Every day, businesses extend more of their services to the internet in an effort to cater to millennials and upcoming generations of consumers. Those in the wine industry are no exception. Though somewhat slow to adopt online and digital marketing in the beginning, businesses in the alcohol industry are catching up. One site called the Tasting Room, touted as the fastest growing wine club in the country, offers an online questionnaire that can determine affordable wines that a customer supposedly would like and then deliver them directly to the customer’s door. Part of the assessment involves receiving a tasting kit for the consumer to taste and rate and then completing a survey on the company’s website. Tasting Room’s algorithm then determines appropriate wine selections for you. The customer also rates subsequent shipments so that the wine selections become even more finely tuned over time.
Earlier this year, the Federal Trade Commission (FTC) went after Warner Bros. Home Entertainment Inc. for not clearly representing that several digital influencers were paid as part of a marketing campaign for the video game Middle Earth: Shadow of Mordor. (See our prior posts on FTC enforcement of its disclosure requirements.) According to the complaint, these influencers were paid amounts ranging from hundreds of dollars to tens of thousands of dollars and received advance-release copies of the game with instructions on how to promote the game. The sponsored videos were viewed more than 5.5 million times. One very popular influencer, Felix Kjellberg, known as “PewDiePie” on YouTube, created a video that has been viewed over 3.7 million times by itself.
We’ve written previously on the rise in FTC scrutiny and enforcement regarding the use by companies of paid digital influencers without the proper disclosures. Recently, retailer Lord & Taylor found itself in the FTC’s crosshairs when it employed bloggers and Nylon magazine as part of a very successful campaign to promote a clothing collection online and on social media. Unfortunately, the campaign was less successful in its compliance with the FTC Act.
Along with colleagues Lori Levine and Lauren Lynch Flick, we’ve taken a closer look at the case in Lord & Taylor Case Shows the Importance of Transparency in Advertising, itself just the latest example of how companies can run into trouble when they fail to fully disclose a promotion or advertisement.