Covert Marketing Unmasked: A Legal and Regulatory Guide for Practices that Mask Marketing Messages
Journal of Public Policy & Marketing
Masked marketing—one form of covert marketing—involves marketing communications that appear to be from independent third parties rather than from product marketers. This article presents a typology of masked marketing practices illustrating whether they may be deceptive to consumers. To accomplish this, the authors apply the Federal Trade Commission’s (FTC’s) three-part definition of deception (i.e., misleadingness, reasonable consumer, and materiality) in the evaluation of such practices. Some masked marketing practices clearly violate FTC rules or guides.
The article recommends that the FTC update its Deception Statement and Endorsement Guidelines to include more examples of masked marketing practices. It also should clarify both its policy position on when a connection between a marketer and a purported consumer is unexpected and should be disclosed and its enforcement policy on undisclosed product placements in entertainment media.