What is stealth marketing?

If you earn money online through product placements and promotions, you should familiarise yourself with the regulations surrounding surreptitious advertising. As stealth marketing becomes more and more recognised, regulators are becoming more active in ensuring that this form of advertising still acts within the limits of the law.

How do we define stealth marketing?

In essence, surreptitious advertising is when a customer gets a product advertised to them without knowing that it is happening. That means that stealth marketing occurs when advertising is not labelled as such, or when the purpose of the advertisement is concealed. For example, product placement in TV shows, sponsored posts on social media, or social validation (e.g. through lots of positive reviews) can all be considered surreptitious advertising, although they’re not all quite the same thing (see below).

Some forms are more permissible than others. But the key point to take away is that it needs to be clear on some level that the promotion or highlighting of a particular product is incentivised.

Stealth marketing, also known as undercover marketing, has been around for a long time. Remember infomercials and paid actors in public product demonstrations? These forms of stealth marketing are now less common, but online it’s a different story.

Here are some tips for spotting surreptitious advertising:

• The advertising isn’t labelled as advertising.
• Surreptitious advertising may involve the promotion of products, goods, food, services, brands or companies.
• Stealth marketing is carried out in return for ‘secret payments’ because the customer or viewer is unaware of the advertising taking place, and both the advertiser and the business benefit.

What are the consequences of stealth marketing?

At the moment, stealth marketing is fairly unregulated, although not without controversy. Even as far back as 2008, the press reported on stealth marketing as a potentially sneaky form of advertising. For businesses, the consequences of stealth marketing are almost exclusively positive. Customers see products in environments they admire or want to be part of, such as in films or TV, for example. Social media is a powerful way for companies to promote their products through public figures that command the respect and admiration of the public, and thereby place their product within that respect and admiration. Now that many profiles have millions of followers, it is also an effective way of reaching a wide and diverse audience.

However, the inherently sneakiness of stealth marketing can have its downsides. If people feel a business isn’t being transparent and clear that it is marketing its product, people may feel that they are being manipulated. This could have a negative consequence for a business because if it seems like a business is too aggressive or manipulative in its advertising, it won’t be beneficial for its PR. One of the reasons why the Unfair Commercial Practices Directive (UCPD) is tightening restrictions on stealth marketing is because it is manipulative.

Additionally, if a company or individual is found to be breaching the regulations around stealth marketing, they could incur heavy fines. Penalties are adjusted to the severity of the violation, but it is possible to face a £5,000 fine and up to two years’ incarceration. Writing or hosting fake reviews can lead to fines of up to 10 per cent of a company’s global turnover. This is why it’s so important to know what the regulations regarding stealth marketing in the UK are.

What are the regulations around stealth marketing?

The main regulation in the UK which affects stealth marketing practices is the Unfair Commercial Practices Directive (UCPD). Paragraph 11 of the UCPD act states that: “11. Using editorial content in the media to promote a product where a trader has paid for the promotion without making that clear in the content or by images or sounds clearly identifiable by the consumer (advertorial)”.

What this means is that if it isn’t expressed in some way that the marketing material has been paid for by a business, for example, then this form of marketing breaches the UCPD. Make sure you make any commercial relationship between yourself and a company clear. If you’re being paid or incentivised to promote a product on social media, you need to make that known.

Additionally, paragraph 22 of the act further states that: “22. Falsely claiming or creating the impression that the trader is not acting for purposes relating to his trade, business, craft or profession, or falsely representing oneself as a consumer”. This is another violation. Creating false reviews of a product could be an example of this kind of prohibited advertising.

‘Stealth’ or ‘undercover’ marketing activities actually became illegal in Japan on 1 October 2023, under the Act against Unjustifiable Premiums and Misleading Representations of Japan (the AUPMR).

Stealth marketing vs product placement—is there a difference?

Surreptitious advertising is not necessarily synonymous with product placement. Stealth marketing can include other forms of ‘invisible marketing’. Anyone who earns money by advertising things might want to label their post or video, for example, as product placement in order to avoid being accused of being disingenuous. Let’s take a look at the kinds of stealth marketing that influences, and bloggers might encounter.

What kind of stealth marketing is OK for influencers and bloggers?

Product placement by influencers is not automatically surreptitious advertising, even if this is not marked. So if you want to become an influencer and make money with Instagram, e.g. by promoting products, make sure that this is noted as product placement or a sponsored post. This is the best way to prevent accusations of being dishonest with surreptitious advertising.

Getting freebies and benefits such as travel could also be seen as stealth marketing. Affiliate marketing links could count as stealth marketing. Other marketing methods relevant to stealth marketing methods include:

• Guerilla marketing
• TikTok marketing
• Affinity marketing

Anyone who wants to make money via blogging, on Instagram, YouTube, or TikTok will be under scrutiny for stealth marketing. If you recommend products from businesses, for example, or tag them or showcase them, make sure that you label this somehow.

Case study: You are an influencer and your content focuses on healthy nutrition on your social media channels. A company sends you a new dietary supplement and requests that you try it out. Of course, you also want to tell your followers about the product. To be on the safe side, you can tag your post with the hashtag #ad or #sponsored. Without labelling, you would be engaging in stealth marketing, which is becoming ever more scrutinised. And you’re putting yourself at risk of violating the UCPD.

Please note the legal disclaimer relating to this article.