LAW OFFICE OF DANIEL MCKENZIE

Counsel for startups and founders.

OVERVIEW

Daniel McKenzie, Esq., has nearly a full decade of experience practicing law and advising startups in business and legal affairs, after co-founding and then serving as lead in-house counsel for a venture-backed startup which was successfully acquired in 2018.

 

Dan's practice focuses on legal issues facing early stage companies, including corporate formation, software licensing agreements, master service agreements, non-disclosure agreements, website terms of use, employee and contractor compensation agreements, and brand sponsorship agreements with social media influencers. Startups with less than five employees are eligible for discounted rates. 

Previously, Dan served as lead in-house counsel for Reelio (acquired by Fullscreen, a subsidiary of AT&T), after co-founding the company in 2012. Prior to Reelio, Dan practiced law as an associate attorney for an AV-Rated law firm in Marin County, California.

Dan graduated from Stanford University with Honors and the UCLA School of Law.

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YouTube Reverses Course on Paid Product Placements and Endorsements Policy



Early this year, YouTube made a few headlines when it changed its policy on paid product placements and endorsements. This change put new restrictions on the use of graphical title cards in sponsored videos - seemingly including logo overlays. Just a few months later, however, it appears YouTube has reversed course. 


Initially, some saw the revised and more restrictive policy as a “move against brand-sponsored videos,” motivated by YouTube’s feeling that it was leaving money on the table with respect to native product integration and video sponsorship – money that YouTube would prefer to funnel into its own advertising ecosystem. YouTube representatives themselves seemed to downplay the change, describing it instead as a mere “clarification of existing policy.” Specifically, the revised policy stated:


“We allow text-only title cards where there is paid product placement for the purpose of paid product disclosure only… Graphical title cards, including the use of sponsor logos and product branding, are prohibited unless there is a full Google media buyout on the partner content by the sponsor.”


Whether the revision was a deliberate change or a simple clarification, it would make sense for YouTube to start thinking about ways to monetize native product integration and video sponsorship. Multi-Channel Networks like Maker’s Studios (reportedly acquired by Disney for up to $950 million last year) have demonstrated that product integration and sponsorship can mean big business. At the same time, platforms like Reelio and others are providing creators with more opportunities to access brand sponsorship deals directly, increasing the total number of sponsorship opportunities for YouTube creators and other social media influencers. The challenge for YouTube, of course, is facilitating product integration and video sponsorship at a truly massive scale – which partly explains YouTube’s current relative inactivity in the space. 


Whatever the motivation for the prior restrictions, however, YouTube has since backed away from the “clarification” made in February and the current policy now reads in the other direction, “[static] title cards and end cards can be graphical and contain the sponsor or marketer’s logo and product branding.” That is, title cards with logos, graphics, and product branding are now completely acceptable! This is effectively a ‘180’ with respect to the use of graphical title cards in sponsored videos and indicates a real change in thinking on the subject. 


The more interesting question is “why” – why go out of your way to change a long-held policy, only to reverse course a few months later? Perhaps YouTube decided that restricting the use of graphical title cards might reduce opportunities for YouTube creators to monetize their videos on YouTube, nudging creators toward competitive video platforms like Vessel. Another explanation (since the new policy makes clear that graphical title cards are permitted for the purpose of disclosing the relationship between creators and sponsors) is that YouTube did not want to run afoul of the disclosure requirements outlined in the FTC guidelines on paid endorsements. Arguably, limiting the methods by which creators can disclose the sponsored nature of their content might violate the spirit of the FTC’s truth-in-advertising laws, perhaps even interfering with them to some extent. 


Whether it was merely a response to a legal issue or perhaps a larger gesture to the creator community, the upside for creators and brands is that YouTube has taken a new position on graphical title cards (including the use of brand logos) that is friendlier to both sides. This seems to indicate continued support from YouTube for paid product placements and endorsements in the near term, even outside YouTube’s own advertising formats. This support is encouraging and likely to continue in the foreseeable future, or at least until YouTube can figure out a way to monetize native brand integration and sponsorship all on its own.

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