What is Stealth Marketing? 6 examples and 3 reasons why you should never do this

An issue in which users on Twitter were posting about the Disney movie “Frozen 2” all at once, leading to suspicions of stealth marketing . Walt Disney Japan’s announcement said that “PR notation was missing,” but users have no way to check whether it is a PR or a general post.

Reference: “It was a communication error” “We recognize that it is not a stealth marketing” Disney comments on Frozen 2’s “steal marketing allegations”

Press release: Apology regarding “‘Frozen 2’ Impression Manga Project”
To all the creators who participated in “‘Frozen 2’ Impression Manga Project” and to all the fans.

Although it is criticized every time it is discovered, stealth marketing continues to be used repeatedly. If you are a person with a general sense, you must be wondering, “Why do we go to such lengths to engage in stealth marketing?” Why on earth won’t stealth marketing disappear?

This time, we will explain what stealth marketing is, why it will never go away, and examples of actual cases .

table of contents

1.  What is stemma?
   1. The discovery of stealth marketing leads to an “internet flare-up”
2. Stemma method
3.  3 reasons why stealth marketing is not allowed
   1. Stemming is deceiving consumers
   2. The entire industry is no longer trusted.
   3. Stem marketing is high risk and low return
4.  Stemming case
   1. Frozen 2 stealth marketing manga incident
   2. Peniock incident
   3. Tabelog high rating incident
   4. Case of impersonation of 4th grade elementary school student by NPO corporation
   5. Sony Gatekeeper Incident
   6. sony david manning incident
5.  Differences in laws regulating stealth marketing in Japan and the world
   1. American stealth marketing regulations
   2. British stealth marketing regulations

What does Stealth Marketing (Stealth Marketing) mean?

Stealth marketing is an abbreviation for ” stealth marketing ,” and it is the act of pretending to be neutral and giving good word-of-mouth and good ratings despite receiving money from a company . It is also called “filthy behavior” or “shaming behavior.”

The word “Stema” suddenly became popular in Japan after the “Penny Auction Fraud Incident” (commonly known as the Penny Auction Incident). A “penny auction” is an auction service that charges a fee for each bid. This case became a big problem because the celebrity posted on his blog that he had received money from a vendor and had made a bid for an item that he had not actually bid on.

The discovery of stealth marketing leads to an “internet flare-up”

In many cases, when a company’s stealth marketing is discovered, it leads to an “online firestorm.” A large number of critical comments are posted in the comment sections of social media and blogs , and a company’s reputation is significantly damaged. In addition, the celebrities and influencers involved may be forced to suspend their activities.

Even if a company or influencer apologizes after the stealth marketing is discovered, the trust that has been lost will not be regained immediately.

Stealth marketing method

There are two main types of stealth marketing methods.

First, it is a method to improve the image of the product by pretending to be a general consumer . If a company employee posts a review praising the company’s products , or if someone who receives money introduces the product while pretending to be a consumer, this is considered stealth marketing.

Another method is to have celebrities and influencers introduce products on influential places such as SNS and information media without specifying that it is an advertisement, and then pay them money in return . In order to prevent stealth marketing, the use of notations such as “#PR” and “#AD” has recently been adopted to clearly indicate that posts on SNS or blog articles are corporate advertisements .

3 reasons why stealth marketing is not allowed

1. They are deceiving consumers.

As mentioned above, stealth marketing attempts to generate interest in its products by falsifying word of mouth and reputation, which will ultimately lead to profit for the company. These actions are only from the seller’s perspective and ignore the consumer’s perspective. Steal marketing is bad because it tramples on the desire to examine products purely based on word of mouth and reputation.

2. The entire industry loses trust.

In the past, it was discovered that large-scale stealth marketing was carried out on Tabelog, Penny Auction, etc., but it caused distrust not only for each service but also for a wide range of people, including the Internet industry and related celebrities. It was become a thing. The incident that occurred at Rakuten, which we introduced this time, has developed into a situation that has seriously shaken the credibility of Rakuten, even though Rakuten itself was not complicit.

Once stealth marketing is discovered, distrust towards the industry increases, people refrain from purchasing, and the internet industry as a whole suffers a disadvantage. If that happens, the first to be weeded out will be small online shops, not giant services like Tabelog and Rakuten. Stealth marketing only creates a negative spiral for businesses, the industry, and above all, users.

3.High risk, low return

In the past, an Osaka system company that became a hot topic for stealth marketing offered a service where you could post 150 reviews for 80,000 yen per month. Just looking at this, it seems cheaper than regular advertisements .

Ever since the term “steal marketing” was coined, a phenomenon has frequently occurred on social networking sites (mainly Twitter ) where users who discover companies suspected of stealth marketing spread the word, and the information spreads all at once .

Now that the catchy word “steal marketing” has become a buzzword and social media has become widespread, it would be difficult to hide stealth marketing so that it won’t be discovered. There is also a risk that employees may inadvertently post information on social media that could serve as evidence of stealth marketing.

All employees must be careful in their work to ensure that stealth marketing is not exposed, but considering the management costs involved, is it really cost-effective to use stealth marketing?

Actual case of stealth marketing

1. Frozen 2 stealth marketing manga incident

On December 3, 2019, seven comics depicting impressions of the movie “Frozen 2” were posted on Twitter all at once, and their unnaturalness caused a stir on social media and other sites, with people questioning whether they were stealth marketing. That’s the problem I had. Walt Disney Japan, the distributor of the film, initially responded that it was not aware that it was a stealth marketing campaign, but on the 5th of the same month, it posted an apology on its website . He explained, “Originally, we had planned to have the creator clearly state that this was a PR, but due to lack of communication, things were left out.”

2. Penny Auction Incident

This is a stealth marketing incident that occurred at a “penny auction” where a fee is charged for each bid. In 2012, it was discovered that the penny auction site “World Auction” was using the Pennioku system, where the more bids you make, the more fees you earn, and the operator was committing fraud by increasing the fees by repeating bids. It became a hot topic in Japan as the “penny auction fraud incident.”

Furthermore, it was discovered that many celebrities had posted on their blogs that they were able to bid on products at low prices on Penioku. It turned out that these celebrities were not voluntarily using penny auctions to bid on items, but were simply requesting postings from the vendors to make it appear that they were using the services. This incident led to a lot of bashing towards celebrities who had posted about Penioku. The term ” stealth marketing ” has also become widely known throughout the country.

3. Tabelog high rating incident

In January 2012, an incident occurred in Tabelog operated by Kakaku.com, where a review agency agency received money and gave reviews to restaurants that had paid high reviews.

The restaurant that received the business reported the incident to Kakaku.com and discovered the incident. The investigation revealed that there were 39 companies that posted false information.

4.Impersonation incident of 4th grade elementary school student by NPO corporation

In November 2014, a fourth-grade elementary school student published a website , causing a huge uproar on Twitter , with people wondering if it was a ploy from the Democratic Party . Twitter users who saw this went so far as to investigate the domain information and expose the domain management organization.

It was actually made by an NPO, not by a fourth grader, and it was announced that it had no connection with the Democratic Party. In the end, the representative of the NPO that created it acknowledged his actions and apologized.

5.Sony Gatekeeper Incident

In 2004, the PSP (PlayStation Portable) and Nintendo DS were in a fierce battle for market share . A problem with the PSP was discovered and became a hot topic on 2ch and blogs, but in response to those posts, there were many posts defending the PSP and bashing the Nintendo DS, so we analyzed the IP of the posts .

GateKeeper**.Sony.CO.JP

It was discovered that the post was posted by someone within Sony. It was an incident that turned out to be an organized crime due to the large number of posts.

6.Sony David Manning incident

He created a non-existent film critic and wrote reviews praising his company’s films for over a year. An incident in which a synthesized voice appeared in an interview on a radio program, etc., but it could not be concealed and it was discovered that it was a fabrication by Sony Pictures. People who went to see the movie after reading reviews were to pay $5 per person.

Differences in laws regulating stealth marketing in Japan and the world

I hope you understand that stealth marketing is an act of deceiving consumers. So what about the laws that regulate it? Let’s take a look at the situation in Japan and overseas.

American stealth marketing regulations

In the United States, the Federal Trade Commission (FTC) revised its Guides Concerning the Use of Endorsements and Testimonials in Advertising in 2009 to clearly clarify the use of stealth marketing. It is regulated.

British stealth marketing regulations

In 2008, the United Kingdom enacted the Consumer Protection from Unfair Trading Regulations 2008 , which criminalizes stealth marketing.

Japanese stealth marketing regulations

In Japan, on the other hand, clear standards have not yet been established. However, the opinions of specialized organizations and experts generally agree that it is a violation of the law.

Specifically, it may violate the Act on Premiums and Representations, the Unfair Competition Prevention Act, the Health Promotion Act, the Pharmaceutical and Medical Device Act (formerly known as the Pharmaceutical Affairs Act), and the Medical Care Act, depending on the type of industry.

Article 1 of the Act on Prevention of Unjustifiable Premiums and Misleading Representations states the following:

This law stipulates restrictions and prohibitions on acts that may impede voluntary and rational choices by general consumers, in order to prevent customers from being lured by unfair premiums and representations related to transactions of goods and services. The purpose of this regulation is to protect the interests of general consumers.
Act on Prevention of Unjustifiable Premiums and Misleading Representations

Advertising itself is prohibited under the Pharmaceutical and Medical Device Law and the Medical Care Law , but under the Medical Care Law , reviews written by users based on their actual experiences on review sites that are not affiliated with medical institutions are considered ” incentives “. It does not meet the requirements for “gender” and is not considered medical advertising .

This subtle oversight in the law may be one of the reasons why stealth marketing is not completely eradicated in Japan.

It is important to sincerely interact with users and build relationships with them.

According to a Nielsen survey, 84% of consumers say they trust reviews from friends and family, and an additional 68% say they trust consumer reviews online .

Even now, when stealth marketing is being viewed as a problem, the power of word-of-mouth on the internet remains strong (which is probably why stealth marketing will never go away).

If you are not chosen by users to the extent that you have to use stealth marketing, you should improve the fundamental aspects rather than attracting customers. If you want to provide a service that continues to generate revenue, you need to take your users seriously and reflect what they want in your service.

Instead of getting distracted by temporary profits, think about how you can build good relationships with users and get them to continue using your services.