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Celebrity bloggers not required to disclose paid endorsements

by Philip Brasor

In December several celebrities were forced to apologize publicly for stating on their personal blogs that they had “won” items on so-called penny auction websites when, in fact, they hadn’t.

Penny auction sites, which first appeared in Germany in 2005, offer people the chance to bid online for merchandise, but because these transactions occur in cyberspace they are difficult to police. Since 2009, when penny auctions first appeared in Japan, there have been complaints about sites ramping up bids through computer programs and other means. Participants have to pay for each bid they make, anywhere from ¥30 to ¥100, which add up quickly when it’s for an item everybody wants, such as a cheap iPad.

Osaka and Kyoto police are currently investigating a company called World Auction, and have arrested its manager and three others for fraud. Allegedly, World Auction not only artificially generated bids for its penny auctions, but some items offered for sale never even existed. World Auction paid several famous people to write on their blogs that they were able to purchase specific items on the site and how much they paid, but it turns out they didn’t even participate. Sexy idol and TV personality Aki Hoshino reportedly received ¥300,000 from World Auction to write that she’d bought an air filter from the site for ¥1,080.

In the United States, federal law was revised in 2009 to restrict certain types of online PR. Anyone who receives compensation to promote something on a blog or website must say so clearly. So far, there is no comparable law in Japan regulating this practice, known as stealth marketing, so Hoshino and her ilk are not liable in the crackdown on World Auction. They have simply been embarrassed in the media, which has since become more interested in stealth marketing as a result of the scandal.

A recent item in the Tokyo Shimbun profiled a young freelance writer who answered an ad to write copy for a jewelry company. The job required her to write 200 blog posts of 500 characters apiece. The agent who placed the ad paid her a small fee per post with a promise of more lucrative jobs later. Since she was not posting these pieces herself the writer did a search using phrases she had written and found them on numerous anonymous or pseudonymous blogs with links to sales companies. She surmised that the agent was paid by these companies to get their products mentioned in as many blogs as possible, and the agent hired her to write copy which was then distributed on fake blogs. The agent was fooling its customer and the general public, both of whom are meant to think that the copy was being written by actual bloggers. The writer eventually stopped working for the agent, but ads for this kind of work remain common on job sites.

The weekly magazine Aera went further behind the penny auction story to investigate the blog platform the accused celebrities used: Ameba, which is operated by a company called Cyber Agent. About 13,000 showbiz personalities have personal blogs on Ameba as a means of interacting with fans. Cyber Agent told Aera it has nothing to do with World Auction, but it makes a great deal of money through “article-matching,” a scheme that brings companies together with Ameba bloggers who might be useful for those companies’ promotional purposes. Cyber Agent insists that it “screens proposals the same way other media screen ads,” but any subsequent transactions between advertisers and bloggers are the affairs of those two parties and have nothing to do with Cyber Agent. After Cyber Agent makes the introduction and collects its fee, the advertiser presumably cuts a deal with the blogger’s management, which then gets the celebrity to mention the advertiser’s product or service in his/her blog. In many cases, especially with very popular celebrities, the management probably write the blog posts themselves. Aera says such endorsements cost anywhere between ¥400,000 and ¥4 million, depending on the celebrity and the nature of the plug.

There is no substantial difference between stealth marketing and traditional advertorial — articles paid for by advertisers and published in magazines and newspapers — which are clearly labeled as being promotional in nature. Interestingly, it is an ad executive who tells Aera that he doesn’t think people who read celebrity blogs are aware that some of the “opinions” about successful diet plans or interesting gadgets are paid for, and so these posts qualify as stealth marketing. The article also suggests that Cyber Agent’s role has become superfluous. Ad agencies are already going straight to talent managers to enlist their celebrity charges to write blog posts, which, as one expert points out, are a “win-win” situation for both sides, since blogs have low production costs compared to traditional forms of advertising and self-promotion.

But even though celebrity bloggers are not required to mention that they are receiving money from advertisers, the process is anything but secretive. Displaying typical trees-for-forest myopia, the reporters who cover this topic don’t seem to realize that the kinds of celebrities who maintain fan-based blogs are basically in the business of promotion, and not just in cyberspace. If they belong to a talent agency, anything they do, whether it’s acting, singing, telling jokes, chatting on variety shows or writing blog posts, is in the service of obtaining PR and advertising jobs, which are the most lucrative work a celebrity can get. The reason so many talentless idols star in TV dramas is that they already have multiple deals with ad agencies and those agencies buy air time for those dramas. And since products and services are now the subjects of many variety and quiz shows, TV personalities have become “experts” in matters such as convenience stores, family restaurants and home electronics, the better to attract TV production houses whose first order of business is to stimulate advertising. So the term “stealth marketing” is really a misnomer. There’s nothing stealthy about something that’s right in front of you.