Creaxion Corporation
The FTC alleged that PR firm Creaxion promoted an insect repellent during the 2016 Zika outbreak using paid athlete endorsements presented as independent opinion and advertising disguised as magazine editorial. It settled by consent order.
Resolved. Refunded, settled, ceased operating, or the claim did not hold up. Kept for the record.
Identity
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- Registrations
- In the Matter of Creaxion Corp. (FTC administrative proceeding 172-3066, final orders 2019)
- Locations
- Georgia
- Jurisdictions
- United States (federal)
A campaign built on the Zika outbreak
Creaxion, a Georgia public relations firm, proposed launching its client’s new mosquito repellent with a campaign tied to the 2016 Zika virus outbreak and the Summer Olympics in Brazil. It partnered with Inside Publications, publisher of Inside Gymnastics magazine, to obtain athlete endorsers.
Two gold medalists were engaged as endorsers and each received several thousand dollars. Creaxion drafted, reviewed and monitored certain social media posts and advertorials. According to the complaint the athletes posted endorsements without disclosing they were paid, the magazine reposted them without disclosure, and Inside Gymnastics ran paid advertisements disguised as features.
The FTC separately alleges that Creaxion reimbursed its own employees and “friends” for buying and reviewing the product on Walmart.com.
What was charged
Three things: falsely representing that endorsements reflected the independent opinions of impartial users; failing to disclose material connections between the endorsers and the marketer, including that some endorsers were paid by or employed by the PR firm; and falsely representing that paid advertising was the independent opinion of an impartial publication.
The orders
The consent orders bar misrepresenting the status of any endorser or reviewer as an independent user, require clear and conspicuous disclosure of unexpected material connections within the endorsement itself, and bar presenting paid advertising as independent editorial opinion.
They also impose a monitoring duty: notify endorsers of their responsibilities, build a system to review endorsements, and terminate endorsers who do not comply.
What is not established
A consent order is for settlement purposes only and is not an admission that the law was violated.
Sources
Every claim above rests on one of these. Open them and check.
- Enforcement action November 13, 2018
- Enforcement action February 11, 2019
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First recorded November 13, 2018 · Last updated February 11, 2019