Friday, August 30, 2019

Juul's influencer marketing is reportedly drawing scrutiny from the FTC | Advertising Age

Juul, the electronic cigarette maker, is reportedly under new scrutiny from regulators for its marketing practices, including for having paid popular social media personalities to promote the brand.

On Thursday, The Wall Street Journal reported that the Federal Trade Commission has opened an investigation into the company’s marketing. Citing unnamed sources, The Journal says the FTC is "looking at whether Juul engaged in deceptive marketing, including by targeting minors or using influencers."

Juul Labs declined to address any potential inquiry but did issue a statement about its advertising practices. “We have never marketed to youth,” a Juul spokesman said in an e-mail statement. “Our earliest marketing campaign in 2015 was intended for adults in the 25- to 34-year-old demographic and lasted for six months. If one views the sales and revenue data, there is no evidence that it drove use, youth or otherwise. Nonetheless, we regret that the campaign was executed in a way that was perceived as appealing to minors.”

The company went on to say that it has changed its marketing practices to only feature models who are older than 35 years old. The older models mark a departure from Juul’s earliest marketing strategies. In 2015, the company’s first major campaign, called “Vaporized,” flooded social media sites like Facebook, Instagram, Twitter and YouTube. Juul tapped “influencers,” popular internet users hired by brands as online spokesmodels, who could have appealed to teens.

“The way Juul marketed in its early period was very much an appeal to youth,” Robert K. Jackler, a doctor and professor at Stanford University School of Medicine, said in a phone interview on Thursday. Jackler has studied the marketing of Juul from 2015 to 2018, and he recently testified to Congress about the tactics he observed, many of which he sees as reminiscent of how tobacco companies went after the youth market for decades.

Juul’s marketing playbook may have borrowed from traditional tobacco, but it also employed all the latest techniques of modern online advertisers. There were influencers, hashtags, product demonstrations at parties, and affiliate programs. Affiliates are reviewers who post about products online and receive a percentage of any sales they help drive through website links they share.

Juul’s use of influencers is just the latest example of how that form of social media advertising can run into conflict with regulators. For instance, the FTC has gone after influencers for not properly disclosing ties to brands, and it has mandated clearer labeling when an advertiser pays for a social media post.

On the dark side of influencer marketing, there are concerns about highly regulated industries like tobacco using social media to skirt the advertising constraints on more traditional media.

For its “Vaporized” campaign, Juul worked with two ad firms, Grit and Cult Collective. “Juul marketing in its first year involved a lot of 20-somethings doing behaviors typical of underage teens,” Jackler says. He notes that Juul hired “professional ad agencies. They certainly knew who these ads would appeal to.”

Juul has since stopped promoting products on social media and moved to more age-appropriate models. “Our paid influencer program, which was never formalized, was a small, short-lived pilot that ended in 2018,” the Juul spokesman said in the e-mail statement. “We worked with fewer than 10 adults on JUUL-related content, and they were all smokers or former smokers over the age of 30. JUUL spent less than $10,000 on influencers.”

But even without the company’s help, Juul hashtags thrive organically on Instagram and other social channels. “Even though they stopped social, the amount of viral peer-to-peer promotion of Juul is nonstop," Jackler says.


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