Advertisers Draw Fire for Using Undercover and MLM Tactics

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Did you know your Uncle Fred may be getting a commission on those nutritional products he said you, Â?just had to haveÂ?? Did you know that the hottie at the bar may have been paid to Â?let you buy her a drinkÂ?.

As advertising has become advertising ad nauseam, and we are forever being pitched to, marketed to, and appealed to by someone trying to sell us something more advertisers are looking at new ways to deliver their message to you. This has resulted in a mix of marketing tactics that are drawing fire. Some are new versions of old techniques and some are very new. Consider that many advertisers are already paying your friends or in some cases even hiring actors to strategically engage you in their product- with or without your knowledge.

If the current trends hold true it’s almost certain that you’ll be the target of “undercover” or “referral marketing” as more companies use undercover marketing and more of your friends will start trying to make a few extra bucks referring people to the products that offer them commissions for making those referrals.

Undercover Marketing

Whether you like it or not, undercover marketing is here to stay. Whether you know it or not, it may already be a part of your life.

Consider this. The last time a friendly tourist asked you to take their picture with an impressive new camera or an attractive woman at the bar said you could buy her a drink; they both may have been “working”. These are examples of what is being called Undercover Marketing. In these examples the company paid people to pose as tourists or bar patrons respectively. The “tourists” job was to show as many people as possible all the features of a new camera that Sony coming out with. The models were paid to look good of course, but you won’t see them holding anything but a Sky Vodka. Not when their “working” anyway.

One of the larger companies in this industry is Big Phat Promotions. They’ve drawn both protest and attention for their unique marketing practices that they now employ in 30 cities across the United States and Canada. The company defends their tactics as "spontaneous" and "virile" approaches to product promotion. Critics however, argue that paying actors to target consumers in these settings is unethical.

Internationally, undercover marketing has brought legal action. Tobacco Company, Philip Morris was recently required to pay a fine for a cigarette campaign that targeted unsuspecting young women during a fashion show. The New South Wales government has enacted legislation preventing tobacco companies from using similar undercover marketing practices in the future.

Adam Salacuse, CEO and President of Alt Terrain, LLC, a Boston-based agency specializing in alternative promotion services, stresses undercover campaigns should only be used in conjunction with larger, more traditional advertising campaigns. "It is always best to be honest with people and if used properly, alternative marketing can be a unique and relevant experience that the consumer will always remember".

Gary McCarron, Asst. Communications Professor at Simon Fraser University, Vancouver, says the public is already immune to most mainstream advertising and new research indicates that advertising that doesn't seem like advertising, is the new way to reach our jaded minds.

McCarron warns that if advertising becomes so sneaky that it is unrecognizable from the everyday experiences of defenseless consumers, it will damage corporate credibility and the resulting state of distrust could have an extremely negative effect on social interaction.

Referral or Network Marketing

Do the words MLM, Network Marketing or multi-level-marketing ring a bell? These words all describe companies that pay you commissions for referring people to their products.

MLM or Network Marketing is back. The MLM Direct Selling Associate now reports that nearly 75% of all Americans have now used or been presented with a product from a Network Marketing company. The most well known, International, Network Marketing Companies are Amway (now Quixtar), Mary Kay and Life Force International.

The allure of Network Marketing or MLM to consumers is the massive amounts of money that some in the industry claim to make. These companies pay you a commission on all the products you sell. They also pay you commissions on the products that anyone you refer to the company, sells. If the people you refer refer others, you earn commissions on the purchases of those people too.

Sound like a pyramid? There’s a difference. Really. Network Marketing has exploded in the last 20 years since Amway fought their landmark case making and distinguishing the MLM or multi-level commission structure as legal and separate from a illegal pyramid structures.

MLM or Network Marketing companies offer you and your friends of course, commissions for referring people to their products. These companies now sell every kind of product you can imagine.

Chris Tinney, Founder of The Best MLM Business ( and MLM Forums ( says many in his industry used undercover marketing in the past but have found parts of it turned the public off, “Too many people have memories of going somewhere with a friend only to be surprised to find themselves front and center at an opportunity meeting for some kind of home based business.”

He says Network Marketing still teaches people to go into social settings to pitch their products, however, they’ve learned it works much better if you’re up front about whom you are and what you’re doing. Tinney claims that if a marketer has to lie they’ve already made a mistake in choosing the social setting. He says this is the most important step. Once in that setting he says to be upfront about the product you represent.

Tinney claims that by being in places where people are predisposed to want your products and being “upfront” about it, that they'll approach the marketer and initiate the interaction. He claims this is much different than what the public perceives as undercover marketing.

As competition to reach consumers increase undercover and referral based marketing is sure to become more and more a part of our lives. The challenge will be for marketers to use these tactics in such a way that the don’t alienate the very consumers they’re hoping to win over.

To learn more about MLM and Network Marketing visit

Chris Tinney hosts a private forum at and blog at

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