An actor posing as a tourist to “sell” the benefits of a new camera phone and ad billboards surrounding an online skateboarding game are becoming increasingly common forms of marketing. As consumers surf the Internet, watch a television program, or even chat with friends over coffee, they are subjected to advertisements often without realizing it.

Most consumers are well aware of television and magazine advertising, and a 2007 Nielsen study shows that just over 50% of consumers trust this form of advertising. With increasing distrust of common marketing tools and the advent of TiVo allowing consumers to bypass traditional advertisements, marketers are looking for alternative ways to deliver their message.

Researchers at Babson College and Marquette University chronicle the latest types of marketing practices in a forthcoming article in the spring issue of the Journal of Public Policy & Marketing and call for the Federal Trade Commission (FTC) to keep pace with modern marketing practices. Ross D. Petty, a Professor of Marketing Law and J. Craig Andrews, a Professor of Marketing, recommend that the “FTC update its deception statement and endorsement guidelines to include modern masked marketing examples, clarifying whether the marketing nature of communications might be deceptive and under which circumstances marketers will be held responsible for statements made by their agents.”

The FTC regulates marketing practices, but Petty and Andrews warn that “the practice of marketing advances at a pace far faster than that of marketing regulation.” The FTC’s current “Policy Statement on Deception” dates to 1983 – an era when Mr. Whipple was warning consumers not to squeeze the Charmin. Today “posers,” a term the authors define as paid actors pretending to be average citizens, zoom up to cafés on trendy scooters to chat about the bikes or blog about the latest video game console. Consumers surfing the Internet for a gift idea may come across the blog and not realize that the content wasn’t posted by an excited consumer but rather marketers from an electronics company. Petty and Andrews cite these and other examples of posing and state that the FTC has only taken action against companies in a few limited instances even when consumers can be misled by the lack of clear and conspicuous disclosure.

Ross D. Petty and J. Craig Andrews, “Covert Marketing Unmasked: A Legal and Regulatory Guide for Practices That Mask Marketing Messages” Journal of Public Policy & Marketing. Spring 2008.