Phia, the affiliate shopping startup co-founded by Bill Gates’ daughter Phoebe Gates, which Bloomberg recently alleged claimed commissions on sales it didn’t actually drive, might also be engaged in another form of potentially questionable behavior: undisclosed UGC ads.
Earlier this month, Inc. reported some consumers had complained to the FTC about Phia and allegedly undisclosed UGC ads. Phia declined to comment for that story, and the FTC said the complaints hadn’t been verified.
Now, an AdTechRadar review (that’s us, obviously) of what appear to be Phia ambassadors or accounts promoting Phia on TikTok found nearly 20 accounts generating thousands of views on videos where the relationship with Phia wasn’t always explicitly clear. Some accounts appear dedicated to Phia, while others post Phia-related content alongside similar UGC promoting other brands.
Accounts include:
- https://www.tiktok.com/@styledwithsally
- https://www.tiktok.com/@dailywithsar
- https://www.tiktok.com/@sophiapalas
- https://www.tiktok.com/@_stylewithava
- https://www.tiktok.com/@stylewithchails
- https://www.tiktok.com/@fashion.with.ry
- https://www.tiktok.com/@stylewithlana1
- https://www.tiktok.com/@kaelyn.fits
- https://www.tiktok.com/@avery.fashionn
- https://www.tiktok.com/@shopitupxkayda
- https://www.tiktok.com/@styledwsammi
- https://www.tiktok.com/@jessie.daily50
- https://www.tiktok.com/@vlovesshopping
- https://www.tiktok.com/@sashiworewhat
- https://www.tiktok.com/@livstylesecrets
- https://www.tiktok.com/@andii.edit
- https://www.tiktok.com/@shopwithryanne
- https://www.tiktok.com/@roxydoliveira_
Here are a few examples of videos where what appears to be a Phia ad/endorsement is presented as a creator’s shopping hack:
There were also videos about using Phia to digitize your closet:
Some of the potentially undisclosed ads also leverage the Kardashian name — several family members are Phia investors — as a hook to get people to stop scrolling and watch:
When undisclosed UGC performs well organically, the company supporting the creators might then put paid dollars behind the content to boost its reach or repost it through the company account with a more formal disclosure. They might also mimic the style and format of successful posts or use the performance data to inform guidance for other creators they partner with.
Why This Matters:
We’ve written about Cluely and undisclosed UGC ads before. These ads often come from accounts run by “ambassadors” who promote a brand or service as if they simply happen to use it, without explicitly disclosing that the content is advertising.
In some cases, there is a softer disclosure, like “#ambassador,” “#phiaambassador” in this case, or “created with Phia,” but these don’t necessarily make it immediately clear to the end user that the content is an ad. The FTC stipulates that sponsored content/endsorsements should be clearly disclosed, hence, perhaps, the complaints Inc. reported on.
While some of the accounts have bios listing them as Phia ambassadors, making the relationship more explicit, more often than not, you see content on TikTok based on what’s served to you in your personalized For You Page, so actively checking bios can be rare.
Here’s a good example where the account is explicit about being a Phia ambassador:
However, the account’s most popular video, which has been viewed more than 385,000 times since March, appears to promote Phia but includes no disclosure in either the video itself or the accompanying caption (as far as we can tell):
Undisclosed UGC is a growing problem on TikTok and other platforms, where it’s relatively cheap to enlist an army of young ambassadors to post. Phia, in fact, put out a call for TikTok and Instagram ambassadors last October, promising to pay “monthly for content creation,” along with “partner gifts” and “exclusive Phia merch and gifting opportunities.”
Our Take:
Interestingly, you would think that after the Bloomberg articles about cookie stuffing, followed by the Inc. article about the FTC complaints, the Phia team would buckle down on any behavior that could be seen as sketchy or maybe unethical. The accounts have continued posting regularly, with some even posting in the last 24 hours.
Sure, that might be unfair, as a lot of young startups do this. It’s not a Phia-specific phenomenon. But, obviously, when questionable behavior seemingly gets exposed, increased scrutiny follows across all aspects of the business, especially when it comes to anything that could be considered deceptive marketing.
