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The Consumer Affairs Agency will regulate what is called stealth marketing. Stealth marketing is the practice of a company advertising its products or services in paid posts, usually online, disguised as legitimate online reviews and consumer feedback.
The agency determined that such marketing tactics prevented consumers from making rational purchasing decisions unless they were informed that posts were actually being paid for.
Under the Act against Unjustifiable Premiums and False Representations, which regulates false representations, etc., it is expected to be added to the list of prohibited business activities from next fiscal year.
Foreign authorities have also started cracking down on stealth marketing, also known as undercover marketing, to keep consumers from being deceived.
According to the agency, Japan is the only country among the top nine OECD countries in terms of nominal gross domestic product that does not regulate the practice.
Mai Kikumori, an associate professor of business administration at Ritsumeikan University in Kyoto, hailed the agency’s move as a step to ensure some deterrence to questionable marketing strategies.
“Given that Japan is a stealth marketer’s paradise, imposing regulation is a step in the right direction,” she said. “Companies were asked to self-regulate their marketing in Stealth, but not all companies were of the same mind. It means that you have obtained
The paid post equivalent of stealth marketing is not at all obvious. Examples of such marketing ploys include social media posts, product reviews on online shopping sites, and comments on digital platforms.
In addition to celebrities and influencers, many large corporations have been found to be involved in stealth marketing.
Existing laws against unfair giveaways and misleading representations prohibit the representation of goods or services as better than they really are, but have no jurisdiction over stealth marketing.
Businesses advertising their products will be subject to the planned regulation, sources said. Failure to designate an ad as paid advertisement or as an advertising or PR blurb is subject to administrative sanctions.
This means that advertisers will be subject to the planned restrictions, but not those who post comments.
The stealth marketing ban applies to advertising in all media beyond digital platforms, including newspapers, magazines and television.
However, according to sources, it does not apply to repeated anonymous postings on Twitter aimed at swaying public opinion, such as shedding accounts attacking opposition parties. This is because the forthcoming regulation targets the advertising of goods and services.
A panel of experts advising government agencies will compile a set of recommendations on how to regulate stealth marketing.
Many panel members expressed concern over the lack of legal means to control covert marketing, while consumer groups denounced the marketing strategy as equating with deceiving consumers.
Advertisers are also calling for regulatory action, saying the voluntarily imposed restrictions are too restrictive to be truly effective.
In a survey of 300 influencers on social media, 41% said they were asked by advertisers to collaborate on stealth marketing.
Of these, 45%, or 1 in 5 out of 300, complied.
Kikumori of Ritsumeikan University said he was “surprised” to learn that so many influencers were involved in stealth marketing.
64% of participating influencers explained that they didn’t understand much about stealth marketing when they agreed to help.
“They didn’t realize that what they did was actually deceiving consumers,” Kikumori said. is showing.”
Studies conducted abroad have revealed the detrimental effect of covert marketing driving up demand for lower quality goods, thus reducing opportunities for higher quality goods to be purchased.
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