payola
Definition
Payola refers to the illegal practice of secretly paying someone to promote a product or service without disclosing that the promotion was paid for. The term originally described record labels bribing radio DJs to play their songs, but today it applies to any hidden pay-for-promotion scheme across any industry. Federal law requires that paid promotions be clearly disclosed to the public.
Example
If you pay a popular blogger to rave about your restaurant but they never tell their readers you paid them, that arrangement could be considered payola and get both of you in trouble with the FTC.
Watch Out
Any time you pay someone to promote your business, you must require them to clearly disclose the paid relationship to their audience, or you risk serious federal penalties.
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This definition is for informational purposes only and does not constitute legal advice. Please consult with a licensed attorney for legal guidance.