What is stealth marketing?
If you earn money online through product placements and promotions, you should familiarize yourself with the regulations surrounding surreptitious advertising. As stealth marketing becomes more and more recognized, regulators are becoming more active in ensuring that this form of advertising still acts within the limits of the law.
How do we define stealth marketing?¶
In essence, surreptitious advertising is when a customer gets a product advertised to them without knowing that it is happening. That means that stealth marketing occurs when advertising is not labeled as such, or when the purpose of the advertisement is concealed. For example, product placement in TV shows, sponsored posts on social media, or social validation (e.g. through lots of positive reviews) can all be considered surreptitious advertising, although they’re not all quite the same thing (see below).
Some forms are more permissible than others. The Federal Trade Commission (FTC) is starting to crack down on some forms of stealth marketing to protect young people and children from being influenced without realizing it.
Stealth marketing, also known as undercover marketing, has been around for a long time. Remember infomercials and paid actors in public product demonstrations? These forms of stealth marketing are now less common, but online it’s a different story.
Here are some tips for spotting surreptitious advertising:
- The advertising isn’t labeled as advertising.
- Surreptitious advertising may involve the promotion of products, goods, food, services, brands or companies.
- Stealth marketing is carried out in return for “secret payments” because the customer or viewer is unaware of the advertising taking place, and both the advertiser and the business benefit.
What are the consequences of stealth marketing?¶
At the moment, stealth marketing is fairly unregulated, although not without controversy. Even as far back as 2008, the press reported on stealth marketing as a potentially sneaky form of advertising. For businesses, the consequences of stealth marketing are almost exclusively positive. Customers see products in environments they admire or want to be part of, such as in movies or TV, for example. Social media is a powerful way for companies to promote their products through public figures that command the respect and admiration of the public, and thereby place their product within that respect and admiration. Now that many profiles have millions of followers, it is also an effective way of reaching a wide and diverse audience.
However, the inherently sneakiness of stealth marketing can have its downsides. If people feel a business isn’t being transparent and clear that it is marketing its product, people may feel that they are being manipulated. This could have a negative consequence for a business because if it seems like a business is too aggressive or manipulative in its advertising, it won’t be beneficial for its PR. One of the reasons why the FTC is looking to tighten restrictions on stealth marketing is because it is manipulative.
What are the regulations around stealth marketing?¶
This is a bit of a gray zone. The FTC stipulate that truth-in-advertising laws must be followed. Where the point of advertising is to hide something, is it still following the guidelines to be truthful? This is a question explored by academics and policy makers, but is worth considering if you’re a business or “stealth advertiser”, e.g. a blogger or influencer who gets paid to promote a product. It should also be noted that signified product placement may not include a direct invitation to purchase. In this way it adds another layer to the gray zone of whether stealth marketing is the same as normal advertising.
Although not illegal in the US, “stealth” or “undercover” marketing activities became illegal in Japan on 1 October 2023, under the Act against Unjustifiable Premiums and Misleading Representations of Japan (the AUPMR).
In October 2022, the FTC convened to discuss stealth marketing in digital media and its effects on children and young adults. This is an ongoing process and therefore means that the rules and regulations might change in the next few months or years.
Stealth marketing vs. product placement—is there a difference?¶
Surreptitious advertising is not necessarily synonymous with product placement. Stealth marketing can include other forms of “invisible marketing”. Anyone who earns money by advertising things might want to label their post or video, for example, as product placement in order to avoid being accused of being disingenuous. Let’s take a look at the kinds of stealth marketing that influences, and bloggers might encounter.
What kind of stealth marketing is OK for influencers and bloggers?¶
Product placement by influencers is not automatically surreptitious advertising, even if this is not marked. So if you want to become an influencer and make money with Instagram, e.g. by promoting products, make sure that this is noted as product placement or a sponsored post. This is the best way to prevent accusations of being dishonest with surreptitious advertising.
Getting freebies and benefits such as travel could also be seen as stealth marketing. Affiliate marketing links could count as stealth marketing. Other marketing methods relevant to stealth marketing methods include:
Anyone who wants to make money via blogging, on Instagram, YouTube, or TikTok will be under scrutiny for stealth marketing. If you recommend products from businesses, for example, or tag them or showcase them make sure that you label this somehow. In some European countries, it is actually a legal requirement to make it crystal clear that you’re being paid to promote something. So if you work internationally, make sure that you follow these guidelines, too.
Case study: You are an influencer and your content focuses on healthy nutrition on your social media channels. A company sends you a new dietary supplement and requests that you try it out. Of course, you also want to tell your followers about the product. To be on the safe side, you can tag your post with the hashtag #ad or #sponsored. Without labeling, you would be engaging in stealth marketing, which is becoming ever more scrutinized.
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