What Is Stealth Marketing? How It Differs from Similar Tactics

With social media marketing now so active, many marketers will have heard the term “stealth marketing” a good deal.

When stealth marketing comes to light, the risk is not only a short-term backlash on social media but long-term damage to the brand image of the company and the product.

This article explains stealth marketing, and also the marketing methods that are easily mistaken for it.

1. What stealth marketing is

1.1 What stealth marketing is

Stealth marketing is
a marketing method that promotes a service or product without making clear to consumers that it is advertising.

Stealth marketing deceives consumers by obstructing sound judgement and choice and by controlling how something is rated. Whether or not payment is involved, promoting a service or product without making clear that the promotion was requested by a company is itself stealth marketing.

1.2 Kinds of stealth marketing

Stealth marketing divides broadly into two kinds.
Both share the fact that the promotion is concealed.

① Impersonation
“Impersonation” stealth marketing is where an operator, or a company connected to the service or product, poses as an ordinary consumer and posts reviews or ratings of it online.

Posting bad reviews of a competitor online while pretending to be a user is also “impersonation” stealth marketing.

② Paid endorsement
“Paid endorsement” stealth marketing is where a celebrity, influencer, blogger or other person with reach is asked and paid to spread a glowing opinion of a service or product they have not actually used.

2. Examples of stealth marketing

Here are three cases of stealth marketing that caused trouble in Japan.

① Tabelog
A case of “impersonation” stealth marketing in reviews on the restaurant site “Tabelog”, which came to light in 2012.
Restaurants listed on the site paid operators to post high ratings and good reviews in return for raising their rating on the site.

② Penny Auction
A case of “paid endorsement” stealth marketing on the auction service “Penny Auction”, which came to light in 2012.
Many celebrities blogged that they had “won items cheaply on Penny Auction” when in fact they had won nothing, were paid tens of thousands of yen to do so, and became part of a fraud that took bidding fees from users. It became a public scandal and the reason the term “stealth marketing” became widely known.

③ Disney
A case of “paid endorsement” stealth marketing around the release of the film “Frozen 2”, which came to light in 2019.
It came to light because manga artists and illustrators posted their thoughts on the film to social media at the same time and with the same hashtag after its release.
The posts carried no disclosure that they were paid, consumers spotted that it was stealth marketing, and it became a major issue.

3. Whether stealth marketing is illegal

In contrast to countries such as the United States and the United Kingdom, where stealth marketing is clearly illegal,
Japan currently has no law making stealth marketing itself directly illegal.
But where it is judged to fall under the Act against Unjustifiable Premiums and Misleading Representations, it is a breach and may be punished.

3.1 What the Act against Unjustifiable Premiums and Misleading Representations is

The Act against Unjustifiable Premiums and Misleading Representations
strictly regulates false representations of the quality, content, price and so on of goods and services, and limits the maximum value of premiums to prevent excessive giveaways, thereby protecting an environment in which consumers can choose better goods and services freely and rationally.

Source:Consumer Affairs Agency

The Act is a law regulating representations that make goods or services look better than they really are, so that consumers can judge correctly when choosing.

The Act mainly prohibits the following two things.

① Misleading representations of superior quality
A “misleading representation of superior quality” is a representation that leads people to believe the performance or quality of goods or services is markedly better than it is, or markedly better than a competitor’s product.

② Misleading representations of advantageous terms
A “misleading representation of advantageous terms” is a representation that makes trading conditions such as price appear more favourable than they are.

Where, as stealth marketing, a business posing as an ordinary consumer, or a celebrity or influencer who has been asked to do so, advertises a service or product as markedly better than it really is, that falls foul of those rules and may be illegal.

4. How stealth marketing differs from other marketing

Affiliate advertising and influencer marketing are methods easily mistaken for stealth marketing.

Below we set out how they differ from it.

・Affiliate advertising
Affiliate advertising is internet advertising where an article on a blog or website promotes the appeal of a product, and a commission is paid when a consumer who saw the page buys or signs up.

The difference from stealth marketing is whether the post states clearly that it is advertising.
To take part in an affiliate programme, that disclosure is required in the site’s “privacy policy” or “terms of use”.

・Influencer marketing
Influencer marketing is a method where influencers are asked to promote a service or product and post reviews with real reach, prompting consumers to act.

The biggest difference from stealth marketing is whether the post states clearly that it is advertising.
On social media, posts carry hashtags such as “#PR” or “#ad”, or a line reading “sponsored by ___”.

5. In summary

We hope that was useful.
This article has covered stealth marketing.
When you advertise, so as not to fall into stealth marketing and damage your brand image,
be mindful of what counts as stealth marketing and of wording that does not mislead consumers.