How adblockers drive YouTubers to shill for mobile game makers

I was told this is how I get paid.

Check out more of our 20th anniversary of Pokémon coverage this week at GamesBeat.

Disclaimer

The organizers of Casual Connect paid my way to Amsterdam. Our coverage remains fair.

The business model of the Internet is changing as more people install tools to block advertisements, and this is forcing content creators into situations where they need to cross the line from neutral commentator to paid spokesperson.

Roostr.tv is a company that acts as an intermediary that connects mobile game studios with YouTube video personalities looking to make more money. It is a marketplace where developers can pay YouTubers to make content featuring their mobile games. Each Roostr.tv partner gets a unique link as part of their advertising campaigns, and they get paid a set amount for each person who installs the game using that link. For developers, this creates a way to avoid paying $4.23 on average for a new player that may not spend a lot — or anything — on their game. That’s a record high rate, according to industry-tracking firm Fiksu. And Roostr claims that it can take that ad buy and turn it into players who tend to have a higher lifetime value.

Earlier this month, the advertising-network company Chartboost acquired Roostr.tv. This enables studios with iOS and Android games to use Chartboost to find video stars willing to promote a game in addition to using Chartboost’s other tools for standard mobile advertising, generating money by selling ad space, and analytics. For YouTubers, developers, and Chartboost, Roostr is a path to generating revenue from the $30 billion mobile gaming business, and it’s an idea that is growing in popularity because it’s getting harder for people who make video content to eek out a living thanks to software like Adblock Plus.

“Publishers are going to run tests [with Roostr] in Q1 and Q2 of this year,” Chartboost chief executive and cofounder Maria Alegre told GamesBeat. “And the expectation is that by Christmas, everyone is going to be using YouTube marketing.”

Fewer people watching ads

The rise of a marketplace like Roostr is the latest indicator that online video is changing.

In October, Google launched YouTube Red, which is a premium version of its Internet video site that is only for subscribers. It eliminates ads and gives you access to exclusive shows for $10 per month. One of YouTube Red’s biggest stars, personality Felix “PewDiePie” Kjellberg (who generates unpleasant sounds while playing games in front of a camera), explicitly said that adblockers are the reason for YouTube Red.

“I think what many people still don’t realize is that: YouTube Red exists largely as an effort to counter Adblock,” PewDiePie wrote in his blog. “Using Adblock doesn’t mean you’re clever and above the system. YouTube Red exists because using Adblock has actual consequences.”

The biggest of those consequences is a reduction in the CPMs (cost per 1,000 views) that marketers will pay to YouTube and the video creators. And that dropping value leads to the creation of services like YouTube Red and Roostr.tv.

“It’s not a secret to anyone that the CPMs people have been earning are dropping lately,” Roostr.tv content producer Elena Nizhnik told GamesBeat. “So a lot of gamers that are doing this full-time have been looking for additional ways to get supplemental income. If it’s not direct sponsorships for gear or something brick-and-mortar, many have been looking at doing deals with mobile publishers.”

An estimate from anti-adblock service Pagefair claims that 198 million people use software to black ads on the Web, and that number is growing rapidly. Nizhnik says she makes YouTube videos herself, and the dropping CPMs are affecting her.

“I’ve seen how my earnings have been dropping this year compared to last,” she said. “So many people are using Adblock. And you only monetize the views where Adblock isn’t on.”

Enter Roostr.tv

Once it approves a streamer, they can go into their Roostr control panel and see the developers that are running campaigns. If the creator sees a game and company they want to work with, they can accept it and start getting paid.

This is a decent deal for developers because the people who download their games from a Roostr YouTube campaign tend to have a higher lifetime value. And with rising costs for player acquisition in traditional channels like video ads in other games, studios and publishers are looking for any tricks to get a bigger return on investment.

Smaller developers benefit in a different way. Many will have an easier time reaching YouTube stars with Roostr. It’s hard for a lot of upstart studios to build relationships with people like PewDiePie, but they might have an easier time reaching someone like famed Hearthstone player Jeffrey “Trump” Shih, who livestreams and makes YouTube videos. But even then, the developers will need to spend a lot of resources reaching someone like that. Maybe he only wants to text at a strange time of the night.

But when a developer uses the Roostr platform, they can reach 10 people who are certainly smaller than PewDiePie (everyone is), but the studios are accessing them in a more efficient, automated way. That’s important because smaller studios don’t need to hire a several people to manage an army of YouTube creators.

For the creators, Roostr is a path to some really big paychecks. And the company makes sure to make that clear.

“The effective CPMs are $50 to $100, and it’s crazy compared to what they’re making on YouTube alone,” Chartboost chief executive and cofounder Maria Alegre told GamesBeat.

The effective CPMs (eCPMs) on YouTube are in the range of $2 to $3.

To highlight the difference, Nizhnik gave a hypothetical example where someone is making $5 per install (CPI). Now, most YouTube veterans are not familiar with the concept of a CPI, but that’s why Roostr breaks it down as an eCPM for them. When they see that 10 people out of every 1,000 viewers installing the game is equivalent to a $50 eCPM, they flip.

“So there’s always a marketplace to go to check if there’s anything out there that you are interested in,” she said. “[If there’s a game] that fits with your audience and you would play anyway, why not also get paid for it?”

Once the creator chooses a campaign, the developers only have mild demands.

“Maybe if the publisher is specific about their geographics, they’ll say that they’ll only pay for people from here or there,” said Nizhnik.

That happens a lot because publishers often want players in the United States and Canada, where the markets are open to new games and the average revenue per player is high.

But that’s the only real restriction. Roostr.tv’s publisher partners do not force the YouTubers to say nice things. Instead, Roostr encourages the creators to act natural — but isn’t it unnatural to get paid to play a game?

Acting natural vs. your livelihood

With a lot of YouTube creators make videos full time, it’s easy to see how many of them would want to generate as much money from Roostr as possible. To do that, they need to get people to use their download link. It would follow that they’d want to make the game look as fun as possible while minimizing its shortcomings.

This creates a conflict of interest that would cause a problem for someone like a journalist or a professional critic. If it appears like a person has a reason to avoid giving a full opinion or a reason to hold back criticism, a reviewer would likely have to pass on covering that product.

Of course, most YouTubers are not journalists or critics. They are entertainers. But at the same time, most of them build their personal brands on trust. That’s the ingredient that makes them so valuable to game companies. Roostr emphasized that point.

“When a game developer posts something about their game [to social media], they get some engagement with it,” said Nizhnik. “But when a gamer, with approximately the same number of followers posts the same message, they get such a bigger response. Because people say ‘that’s the game developer — of course they’re going to say their game is the best. But this guy that I love who has similar taste is saying I should check it out. I’m going to listen to them.'”

But when we posed the idea that YouTubers could erode their valuable trust over time by turning too many of their videos into commercials, Alegre and Nizhnik countered that by claiming they have faith in the people making this content.

“The biggest thing for YouTubers is to grow their audience and to be authentic to their viewers,” said Alegre. “And they understand if they prioritize short-term gain, they will lose out on long-term engagement with their audience. So the smart YouTubers are gonna prioritize that and say whatever comes from their heart.”

“People who are doing this full-time, they realize a short-term paycheck is not going to help them do this for the next decade,” said Nizhnik. “So saying only positive things for a game that is indeed flawed won’t work.”

That’s something that Nick Neri, better known as YouTube personality NickAtNyte, agrees with.

“I do not feel pressure to be fake or only positive,” he wrote in an email to GamesBeat. “Because of how selective I was about which games I would pick.”

Nick also said that he hasn’t worked with Roostr much recently.

“I rarely work with Roostr at this point,” he said. “I did a bit in Q3 and Q4 of 2015, and the campaigns I did work with were good. [But] I lately do not post videos from their site simply because I have no interest in them.”

About the FTC’s disclosure guidelines

But accepting money for making a video isn’t only about a nebulous idea of trust. It is also something that the Federal Trade Commission pays attention to and regulates.

Last year, YouTube multichannel network (MCN) Machinima settled with the FTC after it paid people to make videos to promote Microsoft’s Xbox One without disclosing that they were part of a promotion. Cases like this prompted the FTC to clarify what is expected of YouTube and other video creators.

Here’s what FTC advertising practices associate director Mary Engle said about disclosing a sponsorship deal on YouTube (via Gamasutra):

“Generally speaking, if an advertiser or a marketer is paying someone to write favorable reviews, the reviewer needs to disclose that and that disclosure should be clear and conspicuous, and should be upfront and easy to see where the viewer won’t miss it.

What we say is that it should be easily seen or viewed (or heard in the case of audio) by the consumer or by the viewer. It should be made within the endorsement message, and within the review. We don’t prescribe particular words or phrases that need to be used, but some people might say ‘this is a compensated review’, or ‘I got this free to try.’”

Put simply, the FTC expects YouTube creators to verbally and visually indicate that they are getting paid to promote something as clearly and as early in a video as possible. Reelseo, a disclosurewebsite for video marketers, puts it like this in a blog post:

“There is no hard and fast rule to how you must say/write your relationship, but the fact is that you must state it in a manner that is clear to all readers/viewers.”

Back in 2012, the FTC released a video that explained how this works for anyone writing blogs or making YouTube content. You can watch that here. The animated GIF to the right, which is from the video, illustrates how the FTC expects disclosure at the very beginning of whatever sponsored content you make.

You can see that it expects bloggers to immediately write something along the lines of “A company gave me money or a product to talk about it, here are my thoughts.”

But YouTube creators frequently fail to adequately disclose promotions

Roostr is highly sensitive to the FTC’s rules.

“The YouTubers have to disclose that they are making a sponsored video,” Alegre said without us even having to ask about it.

But after our conversation, we checked some of the YouTube videos that are involved with Roostr campaigns, and a number of them fail to fully live up to the guidelines and best practices set out by the FTC.

Check out this video where YouTube creator JackFrostMiner, who specializes in Minecraft, hypes up Monster Castle. This is a sponsored ad where he is trying to get people to click on his affiliate link:

This 23 minute clip doesn’t mention that this is an endorsement deal until about 80 seconds in. Maybe that counts as “upfront,” but he makes a lot of positive statements about the game in that first minute or so. He also asks his viewers to join his clan in the game. All the while, if you’re watching on YouTube, JFM’s Roostr link is the first thing you see in the description — and that text doesn’t mention this is a sponsorship unless you click “Show More” and read where he talks about his “sponsored link above” buried two lines down.

The FTC isn’t rigid. It just wants promoters to eliminate potential confusion. It wants disclosures that live up to the spirit of the truth-in-advertising laws that guide the federal regulatory body.

In another video, JFM acknowledges the nature of the sponsorship in a rather vague way:

“If you choose to use that link, it helps out my channel,” he says. “And I greatly, greatly appreciate all of the support.”

Again, this might satisfy the FTC, but it might not. Someone watching and listening to this may not fully understand how clicking a link helps out JFM. The FTC made it clear that it doesn’t prescribe a certain phrase that everyone has to use, but it did suggest something along the lines of “I am getting compensated for a product in this video.”

In yet another JFM video, one he uploaded Monday to promote Shop Heroes for iOS and Android, he failed to indicate he was in a financial partnership with the developer of the game for 25 minutes, which is right before the clip ends. This is another instance where he only briefly mentions that it “supports” his channel. He does also mention the relationship in the description, but it isn’t before or even near the link and you have to click the “Show More” option to see it.

When I brought these videos up to JFM and asked about them in the context of what the FTC has said about disclosure, the video creator seemed surprised and concerned.

“I had no idea that there were specific rules and stipulations regarding the manner in which I went about disclosing that a video is sponsored,” he told GamesBeat. “I am glad you reached out to me about this, because clearly I haven’t been doing things right.”

Since talking with him, JFM has said that he will go back and update the descriptions to make sure that he tells everyone his link is sponsored in the first line or two. But the creator further clarified some of the thinking into how YouTubers disclose when they’re getting paid.

“The thing about YouTube is there is a stigma regarding the financial success of content creators,” said JFM. “Most viewers really dislike the fact that sponsored videos exist. The reality is, as long as uploading one sponsored video is more profitable than a full week of generic YouTube video advertising, it will not stop.”

And that’s the primary issue. YouTube created a place where smart, entertaining people could make a decent living, but adblockers have reduced the value of these kinds of videos so drastically that it is nearly financially irresponsible for someone like JFM to refuse to make videos as part of promotional deals with developers. So instead of avoiding them, he has fit working as a spokesperson into his job description.

“For me, sponsored videos have worked well because I am an enthusiast of mobile gaming,” he said. “I see mobile gaming as the future of casual gaming and for that reason I have always been super excited about new games and developers entering the mobile space. I see advertising these games as benefiting the creators and creating a better mobile gaming community on YouTube.”
JFM isn’t alone when it comes to dealing with what the FTC wants from disclosures, and failing to disclose an endorsement isn’t always about counting the seconds before a creator makes a comment about “support.” In a number of the videos we found, some creators only used text several minutes in the video to promote the sponsored link, and others did not verbally mention any financial connection at all.

The most egregious failure to disclose comes from Michael “Molt” Holt, who has done a few videos with Roostr.tv, and in one for the fighting game Marvel Champions, he never mentions anywhere in the video or description that he is getting paid or that the link he is sharing is from a sponsor.

Molt is one of the highest profile YouTubers that specializes in mobile games, and this demonstrates that it’s not just smaller channels that have trouble figuring out how to disclose.

We’ve asked Molt for a comment, but he has not returned our request at this time.

Another clip, from EthanGamerTV, a young boy who mostly makes videos for user-powered Roblox, features the game Dungeon Boss. At no point in the video does the host acknowledge that he (or his legal guardian) are benefiting financially from this video:

The only in-video indication that you get that you are watching a commercial is a bit of text that pops up on screen at about 100 seconds and is only visible for a few ticks of the clock after that. And the disclaimer happens as action is popping off from all corners. It seems very unlikely that viewers will look away from the game or Ethan’s reactions to read a quick pop up message.

It’s even more blatant in part two of Ethan’s Dungeon Boss play. The same message about downloading the game from his “sponsored link below” pops up a full 9 minutes in. It fades out 5 seconds later.

We’ve requested a comment from EthanGamerTV’s business contact, but we have not had a response.

Even NickAtNyte has had issues with disclosure. In one of his videos featured on Roostr’s homepage, he goes through the entire playthrough of Monster Castle without mentioning that he is getting paid. There is also no text in the video signifying his deal.

After we brought this up to Nick, he made the video private. It’s no longer available for viewing. But we did capture the first 50 seconds to help illustrate how he pitches his link without informing the viewer that he is a paid spokesperson:

It’s likely that Nick made a mistake.

“I make my best effort not only in Roostr content but all sponsored and compensated content I’ve posted in the past to give clear and verbal and visual clarification about what they are being presented,” he said. “If there was any FTC error in the production of content, it was not intentional.”

In his defense, Nick has made pretty clear disclaimers in a lot of his other Roostr videos, like the one for World of Tanks. And in his Angry Birds 2 video, he mentions that by downloading that game through his link you are showing developer Rovio that you like his content and support his channel. That’s less clear, but it’s still something.

And Nick has a text-book case of disclosing how the relationship between himself and a developer works in his first video promoting the Clash of Clans-like game Dawn of Steel:

But NickAtNyte still has live videos where he asks people to use his link without explaining at all that he is getting paid for it. In his Clicker Heroes promo, he never verbally mentions he is in an endorsement agreement for the game, and he only has an in-video text message pop up at the very end:

Clearly, inconsistency like this is an issue. We’ve seen JackFrostMiner disclose his Roostr connection to various degrees across multiple videos. But then he’ll use a completely different structure for disclosure for a game like Portal Knights, where he puts a mention upfront in the description and the video. When we asked him about this, he said that these were rules strictly dictated by his agreement.

“This deal was with Fullscreen’s Influencer Plus program and they laid out specific guidelines on what to cover within the video,” he explained. As far as I know this is a very new program.”

The truth is that most people entering into these deals don’t get why they need to inform their viewers about a paid relationship. If everyone understood that this is a tool to help consumers feel like they know when something is getting sold to them, you wouldn’t get vague, buried references to “support.”

None of this even touches on these influential people putting Roostr links on livestreaming sites like Kamcord, Mobcrush, or Twitch where hours can go by without disclosure. And many even throw their links up on Twitter without using the “#ad” hashtag that the FTC suggests.

When we followed up with Roostr.tv about the shaky track record of disclosure by some of its partners, the company provided GamesBeat with the following statement on the issue:

“We are aware of the FTC guidelines for disclosures and our terms with creators require them to comply with all applicable laws.”

Multiple video creators confirmed to GamesBeat that Roostr asks them to make disclosures. That isn’t in question, and that’s all that the company has to do. It’s up to the streamers themselves, who trade in trust with their viewers, to properly make those disclosures. And since many are young people doing this as their first real job, it’s obvious that they are still learning.

That’s why the FTC doesn’t actively seek out people violating these rules. The guidelines and ambiguous threat of legal action exist, but they are a last resort meant to compel regular people in extraordinary situations to try to do better when it comes to transparency.

And most YouTubers will probably get better and better at disclosing the longer they do this as their profession.

More information:









How adblockers drive YouTubers to shill for mobile game makers

I was told this is how I get paid.

Check out more of our 20th anniversary of Pokémon coverage this week at GamesBeat.

Disclaimer

The organizers of Casual Connect paid my way to Amsterdam. Our coverage remains fair.

The business model of the Internet is changing as more people install tools to block advertisements, and this is forcing content creators into situations where they need to cross the line from neutral commentator to paid spokesperson.

Roostr.tv is a company that acts as an intermediary that connects mobile game studios with YouTube video personalities looking to make more money. It is a marketplace where developers can pay YouTubers to make content featuring their mobile games. Each Roostr.tv partner gets a unique link as part of their advertising campaigns, and they get paid a set amount for each person who installs the game using that link. For developers, this creates a way to avoid paying $4.23 on average for a new player that may not spend a lot — or anything — on their game. That’s a record high rate, according to industry-tracking firm Fiksu. And Roostr claims that it can take that ad buy and turn it into players who tend to have a higher lifetime value.

Earlier this month, the advertising-network company Chartboost acquired Roostr.tv. This enables studios with iOS and Android games to use Chartboost to find video stars willing to promote a game in addition to using Chartboost’s other tools for standard mobile advertising, generating money by selling ad space, and analytics. For YouTubers, developers, and Chartboost, Roostr is a path to generating revenue from the $30 billion mobile gaming business, and it’s an idea that is growing in popularity because it’s getting harder for people who make video content to eek out a living thanks to software like Adblock Plus.

“Publishers are going to run tests [with Roostr] in Q1 and Q2 of this year,” Chartboost chief executive and cofounder Maria Alegre told GamesBeat. “And the expectation is that by Christmas, everyone is going to be using YouTube marketing.”

Fewer people watching ads

The rise of a marketplace like Roostr is the latest indicator that online video is changing.

In October, Google launched YouTube Red, which is a premium version of its Internet video site that is only for subscribers. It eliminates ads and gives you access to exclusive shows for $10 per month. One of YouTube Red’s biggest stars, personality Felix “PewDiePie” Kjellberg (who generates unpleasant sounds while playing games in front of a camera), explicitly said that adblockers are the reason for YouTube Red.

“I think what many people still don’t realize is that: YouTube Red exists largely as an effort to counter Adblock,” PewDiePie wrote in his blog. “Using Adblock doesn’t mean you’re clever and above the system. YouTube Red exists because using Adblock has actual consequences.”

The biggest of those consequences is a reduction in the CPMs (cost per 1,000 views) that marketers will pay to YouTube and the video creators. And that dropping value leads to the creation of services like YouTube Red and Roostr.tv.

“It’s not a secret to anyone that the CPMs people have been earning are dropping lately,” Roostr.tv content producer Elena Nizhnik told GamesBeat. “So a lot of gamers that are doing this full-time have been looking for additional ways to get supplemental income. If it’s not direct sponsorships for gear or something brick-and-mortar, many have been looking at doing deals with mobile publishers.”

An estimate from anti-adblock service Pagefair claims that 198 million people use software to black ads on the Web, and that number is growing rapidly. Nizhnik says she makes YouTube videos herself, and the dropping CPMs are affecting her.

“I’ve seen how my earnings have been dropping this year compared to last,” she said. “So many people are using Adblock. And you only monetize the views where Adblock isn’t on.”

Enter Roostr.tv

Once it approves a streamer, they can go into their Roostr control panel and see the developers that are running campaigns. If the creator sees a game and company they want to work with, they can accept it and start getting paid.

This is a decent deal for developers because the people who download their games from a Roostr YouTube campaign tend to have a higher lifetime value. And with rising costs for player acquisition in traditional channels like video ads in other games, studios and publishers are looking for any tricks to get a bigger return on investment.

Smaller developers benefit in a different way. Many will have an easier time reaching YouTube stars with Roostr. It’s hard for a lot of upstart studios to build relationships with people like PewDiePie, but they might have an easier time reaching someone like famed Hearthstone player Jeffrey “Trump” Shih, who livestreams and makes YouTube videos. But even then, the developers will need to spend a lot of resources reaching someone like that. Maybe he only wants to text at a strange time of the night.

But when a developer uses the Roostr platform, they can reach 10 people who are certainly smaller than PewDiePie (everyone is), but the studios are accessing them in a more efficient, automated way. That’s important because smaller studios don’t need to hire a several people to manage an army of YouTube creators.

For the creators, Roostr is a path to some really big paychecks. And the company makes sure to make that clear.

“The effective CPMs are $50 to $100, and it’s crazy compared to what they’re making on YouTube alone,” Chartboost chief executive and cofounder Maria Alegre told GamesBeat.

The effective CPMs (eCPMs) on YouTube are in the range of $2 to $3.

To highlight the difference, Nizhnik gave a hypothetical example where someone is making $5 per install (CPI). Now, most YouTube veterans are not familiar with the concept of a CPI, but that’s why Roostr breaks it down as an eCPM for them. When they see that 10 people out of every 1,000 viewers installing the game is equivalent to a $50 eCPM, they flip.

“So there’s always a marketplace to go to check if there’s anything out there that you are interested in,” she said. “[If there’s a game] that fits with your audience and you would play anyway, why not also get paid for it?”

Once the creator chooses a campaign, the developers only have mild demands.

“Maybe if the publisher is specific about their geographics, they’ll say that they’ll only pay for people from here or there,” said Nizhnik.

That happens a lot because publishers often want players in the United States and Canada, where the markets are open to new games and the average revenue per player is high.

But that’s the only real restriction. Roostr.tv’s publisher partners do not force the YouTubers to say nice things. Instead, Roostr encourages the creators to act natural — but isn’t it unnatural to get paid to play a game?

Acting natural vs. your livelihood

With a lot of YouTube creators make videos full time, it’s easy to see how many of them would want to generate as much money from Roostr as possible. To do that, they need to get people to use their download link. It would follow that they’d want to make the game look as fun as possible while minimizing its shortcomings.

This creates a conflict of interest that would cause a problem for someone like a journalist or a professional critic. If it appears like a person has a reason to avoid giving a full opinion or a reason to hold back criticism, a reviewer would likely have to pass on covering that product.

Of course, most YouTubers are not journalists or critics. They are entertainers. But at the same time, most of them build their personal brands on trust. That’s the ingredient that makes them so valuable to game companies. Roostr emphasized that point.

“When a game developer posts something about their game [to social media], they get some engagement with it,” said Nizhnik. “But when a gamer, with approximately the same number of followers posts the same message, they get such a bigger response. Because people say ‘that’s the game developer — of course they’re going to say their game is the best. But this guy that I love who has similar taste is saying I should check it out. I’m going to listen to them.'”

But when we posed the idea that YouTubers could erode their valuable trust over time by turning too many of their videos into commercials, Alegre and Nizhnik countered that by claiming they have faith in the people making this content.

“The biggest thing for YouTubers is to grow their audience and to be authentic to their viewers,” said Alegre. “And they understand if they prioritize short-term gain, they will lose out on long-term engagement with their audience. So the smart YouTubers are gonna prioritize that and say whatever comes from their heart.”

“People who are doing this full-time, they realize a short-term paycheck is not going to help them do this for the next decade,” said Nizhnik. “So saying only positive things for a game that is indeed flawed won’t work.”

That’s something that Nick Neri, better known as YouTube personality NickAtNyte, agrees with.

“I do not feel pressure to be fake or only positive,” he wrote in an email to GamesBeat. “Because of how selective I was about which games I would pick.”

Nick also said that he hasn’t worked with Roostr much recently.

“I rarely work with Roostr at this point,” he said. “I did a bit in Q3 and Q4 of 2015, and the campaigns I did work with were good. [But] I lately do not post videos from their site simply because I have no interest in them.”

About the FTC’s disclosure guidelines

But accepting money for making a video isn’t only about a nebulous idea of trust. It is also something that the Federal Trade Commission pays attention to and regulates.

Last year, YouTube multichannel network (MCN) Machinima settled with the FTC after it paid people to make videos to promote Microsoft’s Xbox One without disclosing that they were part of a promotion. Cases like this prompted the FTC to clarify what is expected of YouTube and other video creators.

Here’s what FTC advertising practices associate director Mary Engle said about disclosing a sponsorship deal on YouTube (via Gamasutra):

“Generally speaking, if an advertiser or a marketer is paying someone to write favorable reviews, the reviewer needs to disclose that and that disclosure should be clear and conspicuous, and should be upfront and easy to see where the viewer won’t miss it.

What we say is that it should be easily seen or viewed (or heard in the case of audio) by the consumer or by the viewer. It should be made within the endorsement message, and within the review. We don’t prescribe particular words or phrases that need to be used, but some people might say ‘this is a compensated review’, or ‘I got this free to try.’”

Put simply, the FTC expects YouTube creators to verbally and visually indicate that they are getting paid to promote something as clearly and as early in a video as possible. Reelseo, a disclosurewebsite for video marketers, puts it like this in a blog post:

“There is no hard and fast rule to how you must say/write your relationship, but the fact is that you must state it in a manner that is clear to all readers/viewers.”

Back in 2012, the FTC released a video that explained how this works for anyone writing blogs or making YouTube content. You can watch that here. The animated GIF to the right, which is from the video, illustrates how the FTC expects disclosure at the very beginning of whatever sponsored content you make.

You can see that it expects bloggers to immediately write something along the lines of “A company gave me money or a product to talk about it, here are my thoughts.”

But YouTube creators frequently fail to adequately disclose promotions

Roostr is highly sensitive to the FTC’s rules.

“The YouTubers have to disclose that they are making a sponsored video,” Alegre said without us even having to ask about it.

But after our conversation, we checked some of the YouTube videos that are involved with Roostr campaigns, and a number of them fail to fully live up to the guidelines and best practices set out by the FTC.

Check out this video where YouTube creator JackFrostMiner, who specializes in Minecraft, hypes up Monster Castle. This is a sponsored ad where he is trying to get people to click on his affiliate link:

This 23 minute clip doesn’t mention that this is an endorsement deal until about 80 seconds in. Maybe that counts as “upfront,” but he makes a lot of positive statements about the game in that first minute or so. He also asks his viewers to join his clan in the game. All the while, if you’re watching on YouTube, JFM’s Roostr link is the first thing you see in the description — and that text doesn’t mention this is a sponsorship unless you click “Show More” and read where he talks about his “sponsored link above” buried two lines down.

The FTC isn’t rigid. It just wants promoters to eliminate potential confusion. It wants disclosures that live up to the spirit of the truth-in-advertising laws that guide the federal regulatory body.

In another video, JFM acknowledges the nature of the sponsorship in a rather vague way:

“If you choose to use that link, it helps out my channel,” he says. “And I greatly, greatly appreciate all of the support.”

Again, this might satisfy the FTC, but it might not. Someone watching and listening to this may not fully understand how clicking a link helps out JFM. The FTC made it clear that it doesn’t prescribe a certain phrase that everyone has to use, but it did suggest something along the lines of “I am getting compensated for a product in this video.”

In yet another JFM video, one he uploaded Monday to promote Shop Heroes for iOS and Android, he failed to indicate he was in a financial partnership with the developer of the game for 25 minutes, which is right before the clip ends. This is another instance where he only briefly mentions that it “supports” his channel. He does also mention the relationship in the description, but it isn’t before or even near the link and you have to click the “Show More” option to see it.

When I brought these videos up to JFM and asked about them in the context of what the FTC has said about disclosure, the video creator seemed surprised and concerned.

“I had no idea that there were specific rules and stipulations regarding the manner in which I went about disclosing that a video is sponsored,” he told GamesBeat. “I am glad you reached out to me about this, because clearly I haven’t been doing things right.”

Since talking with him, JFM has said that he will go back and update the descriptions to make sure that he tells everyone his link is sponsored in the first line or two. But the creator further clarified some of the thinking into how YouTubers disclose when they’re getting paid.

“The thing about YouTube is there is a stigma regarding the financial success of content creators,” said JFM. “Most viewers really dislike the fact that sponsored videos exist. The reality is, as long as uploading one sponsored video is more profitable than a full week of generic YouTube video advertising, it will not stop.”

And that’s the primary issue. YouTube created a place where smart, entertaining people could make a decent living, but adblockers have reduced the value of these kinds of videos so drastically that it is nearly financially irresponsible for someone like JFM to refuse to make videos as part of promotional deals with developers. So instead of avoiding them, he has fit working as a spokesperson into his job description.

“For me, sponsored videos have worked well because I am an enthusiast of mobile gaming,” he said. “I see mobile gaming as the future of casual gaming and for that reason I have always been super excited about new games and developers entering the mobile space. I see advertising these games as benefiting the creators and creating a better mobile gaming community on YouTube.”
JFM isn’t alone when it comes to dealing with what the FTC wants from disclosures, and failing to disclose an endorsement isn’t always about counting the seconds before a creator makes a comment about “support.” In a number of the videos we found, some creators only used text several minutes in the video to promote the sponsored link, and others did not verbally mention any financial connection at all.

The most egregious failure to disclose comes from Michael “Molt” Holt, who has done a few videos with Roostr.tv, and in one for the fighting game Marvel Champions, he never mentions anywhere in the video or description that he is getting paid or that the link he is sharing is from a sponsor.

Molt is one of the highest profile YouTubers that specializes in mobile games, and this demonstrates that it’s not just smaller channels that have trouble figuring out how to disclose.

We’ve asked Molt for a comment, but he has not returned our request at this time.

Another clip, from EthanGamerTV, a young boy who mostly makes videos for user-powered Roblox, features the game Dungeon Boss. At no point in the video does the host acknowledge that he (or his legal guardian) are benefiting financially from this video:

The only in-video indication that you get that you are watching a commercial is a bit of text that pops up on screen at about 100 seconds and is only visible for a few ticks of the clock after that. And the disclaimer happens as action is popping off from all corners. It seems very unlikely that viewers will look away from the game or Ethan’s reactions to read a quick pop up message.

It’s even more blatant in part two of Ethan’s Dungeon Boss play. The same message about downloading the game from his “sponsored link below” pops up a full 9 minutes in. It fades out 5 seconds later.

We’ve requested a comment from EthanGamerTV’s business contact, but we have not had a response.

Even NickAtNyte has had issues with disclosure. In one of his videos featured on Roostr’s homepage, he goes through the entire playthrough of Monster Castle without mentioning that he is getting paid. There is also no text in the video signifying his deal.

After we brought this up to Nick, he made the video private. It’s no longer available for viewing. But we did capture the first 50 seconds to help illustrate how he pitches his link without informing the viewer that he is a paid spokesperson:

It’s likely that Nick made a mistake.

“I make my best effort not only in Roostr content but all sponsored and compensated content I’ve posted in the past to give clear and verbal and visual clarification about what they are being presented,” he said. “If there was any FTC error in the production of content, it was not intentional.”

In his defense, Nick has made pretty clear disclaimers in a lot of his other Roostr videos, like the one for World of Tanks. And in his Angry Birds 2 video, he mentions that by downloading that game through his link you are showing developer Rovio that you like his content and support his channel. That’s less clear, but it’s still something.

And Nick has a text-book case of disclosing how the relationship between himself and a developer works in his first video promoting the Clash of Clans-like game Dawn of Steel:

But NickAtNyte still has live videos where he asks people to use his link without explaining at all that he is getting paid for it. In his Clicker Heroes promo, he never verbally mentions he is in an endorsement agreement for the game, and he only has an in-video text message pop up at the very end:

Clearly, inconsistency like this is an issue. We’ve seen JackFrostMiner disclose his Roostr connection to various degrees across multiple videos. But then he’ll use a completely different structure for disclosure for a game like Portal Knights, where he puts a mention upfront in the description and the video. When we asked him about this, he said that these were rules strictly dictated by his agreement.

“This deal was with Fullscreen’s Influencer Plus program and they laid out specific guidelines on what to cover within the video,” he explained. As far as I know this is a very new program.”

The truth is that most people entering into these deals don’t get why they need to inform their viewers about a paid relationship. If everyone understood that this is a tool to help consumers feel like they know when something is getting sold to them, you wouldn’t get vague, buried references to “support.”

None of this even touches on these influential people putting Roostr links on livestreaming sites like Kamcord, Mobcrush, or Twitch where hours can go by without disclosure. And many even throw their links up on Twitter without using the “#ad” hashtag that the FTC suggests.

When we followed up with Roostr.tv about the shaky track record of disclosure by some of its partners, the company provided GamesBeat with the following statement on the issue:

“We are aware of the FTC guidelines for disclosures and our terms with creators require them to comply with all applicable laws.”

Multiple video creators confirmed to GamesBeat that Roostr asks them to make disclosures. That isn’t in question, and that’s all that the company has to do. It’s up to the streamers themselves, who trade in trust with their viewers, to properly make those disclosures. And since many are young people doing this as their first real job, it’s obvious that they are still learning.

That’s why the FTC doesn’t actively seek out people violating these rules. The guidelines and ambiguous threat of legal action exist, but they are a last resort meant to compel regular people in extraordinary situations to try to do better when it comes to transparency.

And most YouTubers will probably get better and better at disclosing the longer they do this as their profession.

More information:









Facebook exec jailed over encrypted WhatsApp data says Brazil’s police treated him with respect

Senior Facebook executive Diego Dzodan, who was recently released from a Brazilian jail due to a disputed court order demanding data from the company's WhatsApp messaging service for a confidential drug-trafficking investigation, speaks at the Massachusetts Institute of Technology (MIT) in Cambridge, Massachusetts March 5, 2016.

(Reuters) – A Facebook executive who spent about 24 hours in a Brazilian jail this week said authorities treated him with respect and that the incident will not slow the company’s expansion in Brazil.

Diego Dzodan, a Facebook vice president based in São Paulo, was arrested on Tuesday due to a dispute over law enforcement demands for data from the company’s encrypted WhatsApp messaging service for use in a secretive drug trafficking investigation.

He was released on Wednesday after an appeals judge overturned a court order to arrest him.

“I was treated with a lot of respect,” Dzodan said at a Saturday conference on Latin American business trends organized by students at the Massachusetts Institute of Technology’s Sloan School of Management.

He said Facebook has no access to data that travels over the its secure WhatsApp messaging service, making compliance with the request from Brazilian officials impossible.

“The way that information is encrypted from one cell phone to another, there is no information stored that could be handed over to authorities,” he said.

His remarks came during a Q&A session after a half-hour talk on Facebook’s approach to innovation. He also said his detention would not affect the Silicon Valley company’s plans for the Brazilian market.

“We are extremely committed to Brazil. Brazil is a huge market that really likes Facebook,” he said. “We are very focused on the long term.”

Brazil’s law enforcement officials have said little about their demand for data from the messaging service acquired by Facebook in 2014, saying it could compromise an ongoing criminal investigation.

A Facebook spokesman on Wednesday that the company was pleased that Dzodan had been released, describing his detention as “an extreme, disproportionate measure.”

The incident came as technology companies face mounting pressure from governments around the world to help them eavesdrop on users and censor data. Apple Inc and U.S. law enforcement officials are in a standoff over unlocking the iPhone of a shooter in the San Bernardino, California, attacks.

(Reporting by Jim Finkle in Cambridge, Mass.; Editing by Tom Brown)










Microsoft and Google employees in U.S. National Guard may join cyber war against Islamic State

U.S. Defense Secretary Ash Carter (R) is briefed on the capabilities of the National Guard Cyber Unit at Joint base Lewis-McChord, Washington, March 4, 2016.

(Reuters) – U.S. Defense Secretary Ash Carter said the National Guard’s cyber squadrons will play an increasingly important role in assessing the vulnerabilities of U.S. industrial infrastructure and could be asked to join the fight against Islamic State.

The National Guard – a reserve military force that resides in the states but can be mobilized for national needs – is a key part of the military’s larger effort to set up over 120 cyber squadrons to respond to cyber attacks and prevent them.

One such unit, the 262nd squadron, is a 101-person team that includes employees of Microsoft and Alphabet’s Google. The unit is “famous throughout the country” for several high profile vulnerability assessments, Carter said at the Joint Base Lewis-McChord in Tacoma, Washington late on Friday.

He told reporters the squadron was not currently engaging in offensive cyber missions but could be in the future.

“Units like this can also participate in offensive cyber operations of the kind that I have stressed we are conducting, and actually accelerating, in Iraq and Syria, to secure the prompt defeat of ISIL, which we need to do and will do,” Carter said. “We’re looking for ways to accelerate that, and cyber’s one of them.”

The 262nd squadron’s work includes a study last year on the control system used by Snohomish County Public Utility District in Washington state, which helped the utility strengthen its security, and a 2010 case in which the U.S. Air Force briefly lost contact with 50 Minuteman III intercontinental ballistic missiles.

The 2010 assessment cost about $20,000, much less than the $150,000 that a private sector company would likely charge, said Lieutenant Colonel Kenneth Borchers, deputy commander of the 252nd Cyber Operations Group, which oversees the 262nd squadron.

Borchers said the squadron is the only National Guard group that currently assesses industrial control systems, but it is now looking to train others. It is also studying the security of big weapons programs, such as the B-52 bomber.

Using National Guard units for such work made sense because it allowed the military to benefit from private sector cyber experts, Carter said.

“It brings in the high-tech sector in a very direct way to the mission of protecting the country,” he told reporters. “And we’re absolutely going to do more of it.”

(Reporting by Andrea Shalal, editing by Tiffany Wu)










Why leaving the EU would put London’s booming fintech sector at risk

European Union flag

The stage is now set for a decision that will impact the UK’s business community for years to come. The EU referendum, which is now confirmed to be held on 23rd June, will determine whether or not Britain remains a member of one of the world’s most influential markets, and whether Britain holds a seat at the table which governs it.

For tech firms, in and outside the UK, this undoubtedly places a large question mark over what may be in store and uncertainty has already started to creep into the industry. Clarity on the potential implications of “Brexit” will be difficult to find amongst the trading of wild claims and statistics anticipated over the next few months. Nevertheless, it is vital that we start to seek this clarity if we are to have our voice heard in the upcoming referendum debate.

Innovation and investment

With innovation and investment at its heart, London’s booming FinTech sector has been one of our greatest success stories in recent years. The capital’s unique position as a creative platform for new ideas has led to London becoming an international centre for firms big and small, most of which see our position within the EU as a gateway to 500 million potential customers.

Just last week, a report conducted by Ernst Young declared the UK the FinTech centre of the world, beating Silicon Valley and New York due to its deep talent pool, strong availability of capital and high-demand from clients.

I strongly believe that if we were to abandon the free movement of goods, services, capital and people principles, all of which have been crucial to the growth of London’s tech industry in recent years, we would be putting this hard earned status all at risk.

Leaving the EU would have very direct consequences for London’s tech industry. In the payments sector, for instance, the UK has been a beacon of innovation within the EU made possible by the “passporting” of EU rules which allows a payment company authorised in the UK to conduct business across the EU.

A British exit would mean that payment and money transfer companies like mine will no longer be able to provide their services in the EU unless they incorporate somewhere in the EU and get additional licenses. This would without doubt have an impact on the ease of tech firms operating in Europe, in addition to imposing a further barrier to those looking to expand into the continent.

Funding

Access to funding is another concern that tech firms should be concerned about if Britain opts to leave the EU. Investment is the catalyst for innovation and is a major contributor to Tech City’s success. Being within the EU gives companies in the UK much needed access to seed enterprise investment schemes and venture funding from Europe’s other financial centres such as Frankfurt and Paris.

Disturbing this ecosystem would result in a noticeable tightening of the cash floating around for tech firms to develop their products and services, which is a consideration that needs to be taken into account.

Understandably, there are concerns within the industry regarding the legislative challenges associated with working within the EU, particularly amongst smaller firms. However, this sentiment is felt across Europe and the politicians are beginning to address these concerns.

In fact, we are on the brink of finalising an exciting new Europe-wide project, named the Digital Single Market, to ensure fair competition, data protection, better integrated infrastructure and a unification of digital regulations. The introduction of this programme will increase the ease of doing business, reduce costs and give start-ups the even playing field they need to challenge the status quo.

Even the strongest advocates for Brexit admit that leaving the EU is risky in the short to medium term, and at best a gamble in the long run. Voters will need to weigh this up as they make their choice.

It must be known, however, that London’s ability to compete with its international rivals as the global hub for tech firms will depend on whether we can continue to attract the best talent, ideas and investment to our shores. I strongly believe that a British exit from the EU would hinder these efforts, and result in slower growth, less investment and fewer jobs.

Rajesh Agrawal is founder and CEO of Xendpay, the world’s first “pay what you want” money transfer company. Recently, he has been taken on as business advisor to Sadiq Khan MP, Labour’s London Mayoral Candidate.

This story originally appeared on Tech City News.










Yahoo CFO doesn’t understand intense scrutiny of his company

Yahoo CFO Ken Goldman

It’s hard to find a company as iconic as Yahoo is in tech. Not surprisingly, Yahoo’s been one of the most closely watched tech companies over the past two decades.

But Yahoo CFO Ken Goldman, who’s been in the position for the last four years, doesn’t seem too excited about it. Rather, he’s flabbergasted by the staggering amount of attention his company’s been attracting from the press.

“I’ve never seen anything like the amount of attention we get given our size. You get papers in New York that — I’m not quite sure why they think we are so interesting as a company. It’s amazing to me,” Goldman said at the Morgan Stanley Technology, Media & Telecom Conference on Thursday.

Goldman may have a point. The level of public scrutiny Yahoo faces from moment-to-moment seems almost unprecedented, especially given its relatively small size compared to other tech giants, like Google or Apple — each worth nearly six-times more than Yahoo.

Part of Goldman’s frustration also comes from the fact that there is often inaccurate information about the company in the news. In its most recent earnings call, for example, Yahoo had to publicly dispute some of the claims made about its holiday spending.

“It’s amazing to me how much information is out there, much of which is not correct,” he said.

But a closer look at Yahoo’s past history and its current situation gives a clue to why everyone seems to be so intrigued by its every move. Here are a few reasons why:

Yahoo’s brand: Yahoo’s one of the oldest web companies around, and one of the first dot-com-era companies to go public. It’s almost impossible to find someone who hasn’t crossed paths with Yahoo at some point in their careers in Silicon Valley. It’s probably why so many people seem to be pulling for Yahoo to make a comeback.

Unlocked value: As Goldman pointed out, Yahoo’s one of the three web companies that have more than 1 billion visitors (alongside Google and Facebook). But despite having a strong brand and a huge user base, Yahoo’s management seems to be struggling to convince investors that it has a bright future. Its revenue has been stagnant at best and its share price has been in decline for months.

Perennial hotbed of drama: Perhaps more than any other tech company, Yahoo seems to find itself continually involved in some kind of controversy. From management dysfunction to missed opportunities, Yahoo keeps inspiring stories that draw the attention of readers interested in business drama.










China lays out ‘Internet Plus’ policy to become a tech leader

Security officers stand near the Chinese national emblem as they carry out a check after delegates left at the end of the opening session of the National People's Congress (NPC) at the Great Hall of the People in Beijing, China, March 5, 2016.

(Reuters) – China aims to become a world leader in advanced industries such as semiconductors and in the next generation of chip materials, robotics, aviation equipment and satellites, the government said in its blueprint for development between 2016 and 2020.

In its new draft five-year development plan unveiled on Saturday, Beijing also said it aims to use the internet to bolster a slowing economy and make the country a cyber power.

China aims to boost its R&D spending to 2.5 percent of gross domestic product for the five-year period, compared with 2.1 percent of GDP in 2011-to-2015.

Innovation is the primary driving force for the country’s development, Premier Li Keqiang said in a speech at the start of the annual full session of parliament.

China is hoping to marry its tech sector’s nimbleness and ability to gather and process mountains of data to make other, traditional areas of the economy more advanced and efficient, with an eye to shoring up its slowing economy and helping transition to a growth model that is driven more by services and consumption than by exports and investment.

This policy, known as “Internet Plus”, also applies to government, health care and education.

As technology has come to permeate every layer of Chinese business and society, controlling technology and using technology to exert control have become key priorities for the government.

China will implement its “cyber power strategy”, the five-year plan said, underscoring the weight Beijing gives to controlling the Internet, both for domestic national security and the aim of becoming a powerful voice in international governance of the web.

China aims to increase Internet control capabilities, set up a network security review system, strengthen cyberspace control and promote a multilateral, democratic and transparent international Internet governance system, according to the plan.

Since President Xi Jinping came to power in early 2013, the government has increasingly reined in the Internet, seeing the web as a crucial domain for controlling public opinion and eliminating anti-Communist Party sentiment.

China will “strengthen the struggle against enemies in online sovereign space and increase control of online public sentiment,” said the plan.

It will also “perfect cybersecurity laws and legislation”.

Such laws and regulations have sparked fear amongst foreign businesses operating in China, and prompted major powers to express concern to Beijing over three new or planned laws, including one on counterterrorism.

These laws codify sweeping powers for the government to combat perceived threats, from widespread censorship to heightened control over certain technologies.

(Reporting by Paul Carsten; Additional reporting by Ryan Woo in BEIJING; Editing by Kim Coghill)










Instagram Blocks Deep Links to Rivals Telegram and Snapchat

We just wanted to let you know that our site content is, of course, available to you absolutely free of charge. Our ads are the only way we have to be able to bring you the latest high-quality content, which is written by professional journalists, with the help of editors, graphic designers, and our site production and I.T. staff, as well as many other talented people who work around the clock for this site.