PhotoOn the heels of Facebook's crackdown on “clickbait” in its news feeds, the Federal Trade Commission (FTC) is reportedly eying paid celebrity posts on social media that aren't disclosed as advertisements.

Bloomberg News reports that the FTC plans to lean on advertisers to make it plainly clear when a celebrity is being paid to endorse a product.

It's most likely a reaction to a trend in which the internet has become more commercial, more gimmicky, and more annoying. It's hard to open a news story these days without an ad popping up or a video beginning to play automatically.

Michael Ostheimer, an FTC offical, told Bloomberg that the agency has long been interested in deceptive endorsements and that social media, and its strong influence and impact, just magnifies the problem. The agency, he says, wants to make sure that when a celebrity takes to Twitter to sing the praises of a product, it's genuine or clearly marked as an ad.

Warner Bros. settlement

A case in point is Warner Bros. Home Entertainment's campaign video game Middle Earth: Shadow of Mordor. The company ended up settling with the FTC after the agency charged it failed to let consumers know that it paid a number of online “influencers” to post positive gameplay videos on YouTube and social media. The FTC found that these sponsored videos were viewed more than 5.5 million times.

Under the settlement, Warner Bros. agreed to always make product endorsement disclosures in the future. Further, it cannot misrepresent content that it has paid to produce as genuine or organic.

“Consumers have the right to know if reviewers are providing their own opinions or paid sales pitches,” Jessica Rich, director of the FTC’s Bureau of Consumer Protection, said as she announced the settlement last month. “Companies like Warner Bros. need to be straight with consumers in their online ad campaigns.”

Not even close to being true

It turns out some paid content, adequately labeled or not, isn't even true. Internet readers no doubt have seen the headline “Tragedy In Hollywood: Melissa McCarthy gone too soon.”

First, the headline makes it seem that the actress has died. She hasn't. Those who click on the headline are told that CBS cancelled McCarthy's sitcom, “Mike and Molly,” because she lost so much weight taking a diet pill., the renowned debunker of internet myths, says the story is not true.

“Although this article is presented as a news story, it's nothing more than a scammy ad for a weight loss pill called Garcinia Complex,” the website declares. The actress has not endorsed this pill, used this pill to lose weight, nor offered positive feedback about it.

The way it was

This was less of an issue in the old media world. Newspapers had a longstanding tradition of separating editorial content from advertising. Television infomercials were clearly described as such. In the early 1960s, the government cracked down on radio “payola,” the practice of record companies rewarding radio stations to play certain records, in an effort to boost sales.

But as consumers have abandoned old media and gravitated to the online world, advertising dollars have followed, in search of ways to make inroads. In the absence of clear boundaries, these dollars appear to be pushing the envelope of what's acceptable, or even legal. Sponsored content is everywhere, often causing confusion among consumers who aren't always clear on what's real and what's Madison Avenue.

While some sponsored content is clearly marked, it appears the FTC will look harder for content that isn't.

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