Japan’s Crackdown on Stealth Marketing and Its Repercussions on Influencer Marketing

Japan is set to regulate stealth marketing, whether conducted offline or online. Stealth marketing is a practice that involves paying influencers or celebrities to advertise a product or service under the guise of a genuine opinion.

The Consumer Affairs Agency in Japan is soon expected to classify this practise as "improper representation."

The calls to implement regulations against these practices have arisen in light of TikTok’s recent admission that it used stealth marketing practises to promote influencer content on Twitter. A report released a few months ago stated that TikTok had paid influencers to post videos on Twitter without informing the audience that they were viewing sponsored content. In the report, the Japanese subsidiary of TikTok owner Byte Dance added that it regretted giving consumers a misleading impression and would ensure that it took the necessary measures to prevent such occurrences.

While there were no outright laws in Japan that banned stealth marketing previously, the country had a voluntary code of conduct in place that forbids misleading consumers.

However, with stealth marketing practices becoming widespread on social media, the country plans to implement stringent regulations and controls to curb such malpractices. Violators may be subject to administrative punishment, including an order to prevent a repeat of the incident and naming and shaming.

Stealth marketing is a common guerilla marketing tactic that is employed to generate brand buzz. But the problem with such practices is that they're often rooted in unethical promotional gimmicks. Audiences are pushed into viewing ads without disclosing that it is a branded content.

Will Japan’s recent crackdown on stealth marketing, have overarching effects on influencer marketing and platforms that hinge on influencer content such as TikTok, YouTube Shorts, and Instagram Reels?

Online reviews and influencer endorsements are ubiquitous on the internet, and may face an onslaught of new regulations soon.

With many paid-for promotions not disclosed, the blurry line between advertisements and organic word-of-mouth recommendations has led consumer protection bodies to take action against influencers. In recent years the US Federal Trade Commission (FTC) has also ramped up its efforts to get influencers to ‘clearly and conspicuously’ disclose their relationships with brands.

Does this mean brands must stray away from influencer marketing?

Well, not really. Influencer marketing is not dead and will not be soon. But it may soon evolve with ethical and responsible marketing practices.

As more countries follow suit, explicit labeling of ads will become the norm going forward. Influencer marketing labels may need to be prominent enough so that consumers will easily notice them. Marketers would have to employ transparent and ethical advertising practises across the board. After all, honesty and authenticity is the best digital marketing strategy.

To cope with the current wave of regulations against influencer-brand partnerships, it may be in the brands' best interests to diversify to alternate ways of acquiring and retaining customers. Instead of employing covert advertising strategies, marketers can also opt for direct engagement with prospects and customers.