PepsiCo Refutes Consumer Watchdogs’ Deceptive Marketing Complaint


PepsiCo and its Frito-Lay subsidiary are on notice for “engaging in deceptive and unfair digital marketing practices in violation of Section 5 of the FTC Act” for online marketing campaigns that may seem tame compared to the new Take This Lollipop Facebook-stalking campaign.

The complaint — filed by the Center for Digital Democracy (CDD), Consumer Action, Consumer Watchdog and The Praxis Project — focuses on Frito-Lay’s no longer active digital campaigns for Doritos under the “Snack Strong Presents” branded entertainment banner.

Specifically cited in the complaint to the FTC: the online game Hotel 626 (which launched in 2008) and sequel Asylum 626 (launched in 2009), plus the Doritos Late Night concert series which last year released a Rihanna tie-in. According to the complaint, these efforts and related digital marketing are claimed to “target teens through a variety of stealth interactive marketing and data collection techniques involving social media, immersive multi-media content, mobile phones, and gaming platforms.”[more]

Three ways PepsiCo’s digital techniques are deceptive according to the complaint:

·  Disguising its marketing efforts as entertaining videogames, concerts, and other “immersive” experiences, making it more difficult for teens to recognize such content as advertising;

·  Claiming to protect teen privacy while collecting a wide range of personal information, without meaningful notice and consent; 

·  Using viral marketing techniques that violate the FTC’s endorsement guidelines.

“PepsiCo has used an arsenal of powerful online marketing tactics in these campaigns, including interactive games with storylines designed to heighten arousal and instill fear and anxiety in teens,” stated Jeff Chester, CDD’s Executive Director.  

“We are aware of the filing to the FTC and believe it contains numerous inaccuracies and  mischaracterizations,” Frito-Lay spokesperson Aurora Gonzalez told brandchannel. “PepsiCo and its Frito-Lay division are committed to responsible and ethical marketing practices. Our marketing programs, which are often innovative, comply with applicable law and regulations.”

The complaint comes at a time when Chester is also singling out deceptive advertising as directly contributing to the epidemic of obesity among U.S. adolescents. One out of every three teens is currently overweight or obese, with rates significantly higher for African-American and Hispanic adolescents.

According to a just released report, “Digital Food Marketing to Children and Adolescents: Problematic Practices and Policy Interventions,” commissioned by the National Policy and Legal Analysis Network to Prevent Childhood Obesity (NPLAN) and authored by Chester and Kathryn Montgomery, specific techniques used to beguile a younger demo include (quote):

Augmented reality, online gaming, virtual environments and other immersive techniques that can induce “flow,” reduce conscious attention to marketing techniques and foster impulsive behaviors; Location targeting and mobile marketing which follow young peoples’ movements and link point of influence to point of purchase; and Neuromarketing which employs neuroscience methods to develop digital marketing techniques designed to trigger subconscious, emotional arousal.

“The food industry is targeting teens with a variety of interactive techniques that take advantage of their vulnerabilities,” said Montgomery, Professor in the School of Communication at American University.  “Some of these techniques are unfair and deceptive and are purposely designed to operate under the radar of parents and policy makers.” 

The FTC is being urged to begin its own investigation and bring action to prevent similarly deceptive campaigns going forward, including data collection safeguards for adolescents, declaring them “sensitive users.” 

Putting other digital marketers on notice, Chester told brandchannel that PepsiCo “is in forefront, but we are likely to file other complaints in the next year or so.”

Given the number of entertainment experiences — games, music or otherwise — sponsored by brands these days, they could be plenty busy if they choose.

Still, in PepsiCo’s defense, these particular digital initiatives are (a) defunct, (b) hardly stealth marketing, as they were clearly branded as “Doritos presents” efforts via its Snack Strong Productions banner, and (c) the Hotel/Asylum 626 online games (produced by Goodby, Silverstein & Partners with other agencies) were age-gated, targeting teens who are more hip to sponsored content and entertainment than their elders might give them credit for. Thoughts?


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