FTC Tells Paid 'Influencers' to Disclose When Instagram Posts Are #Ads
The Federal Trade Commission is keeping tabs on the growing trend of brands hiring so-called "influencers"—athletes, celebrities and others with large followings—to promote their products on social media. Up until Wednesday, the agency has put the burden of ensuring proper advertising disclosure on the brands. The agency sent 90 letters to influencers and marketers informing them of their responsibility to "clearly and conspicuously" disclose the business relationships behind social media posts.
April 19, 2017 at 02:08 PM
12 minute read
The original version of this story was published on National Law Journal
In the digital age, the Federal Trade Commission is keeping tabs on the growing trend of brands hiring so-called “influencers”—athletes, celebrities and others with large followings—to promote their products on social media.
The consumer agency has taken the view that advertisement—without proper disclosures—can mislead consumers. The agency has put the burden of ensuring proper disclosure on the brands. Last year, the FTC reached a settlement with Warner Bros. Home Entertainment Inc. over a lack of disclosures for paid promotions of video game Middle-earth: Shadow of Mordor. But it did go after the likes of the popular YouTube personality “PewDiePie” and other influencers who were paid for positive videos and social media posts about the game.
On Wednesday, the FTC turned its attention downstream to the “influencers” themselves.
The agency sent 90 letters to influencers and marketers informing them of their responsibility to “clearly and conspicuously” disclose the business relationships behind social media posts. For influencers, a “material connection” to a brand could be a payment, a business or family relationship or the provision of a free product.
“I think it's a recognition that, in this new age of advertising, everyone needs to be somewhat responsible. The FTC is finally realizing that if companies are going to use these new types of advertisements, the folks who are getting the immediate benefit from it—the influencers—need to be on the same page,” said Greenberg Traurig partner Nathan Muyskens, who represented Lord & Taylor in a settlement with the FTC last year over Instagram posts in which influencers failed to disclose that they had been paid and provided with a paisley dress.
|What new steps did the FTC take?
The mass-mailing of 90 letters represented the first time the FTC has directly contacted influencers to provide guidance on proper disclosure. That education—spelled out in the FTC's “Endorsement Guides”— doesn't mandate specific wording. But the FTC has a few ideas.
“If you see a post labeled 'Ad,' 'Promotion' or 'Sponsored,' or with a hashtag like '#Ad,' the person posting it is giving you important information about their connection to a marketer,” wrote Ari Lazarus, an FTC consumer education specialist, in a blog post Wednesday.
The guidance shows a sensitivity to the word limits such as Twitter's 140-character cap on individual tweets. The FTC has pointed out in the past that “the words 'sponsored' and 'promotion' use only 9 characters. 'Paid ad' only uses 7 characters. Starting a tweet with “Ad:” or “#ad”—which takes only 3 characters—would likely be effective.”
|Who got the letters?
That remains to be seen. The agency didn't reveal the recipients of the letters, only that it wrote them after “reviewing numerous Instagram posts by celebrities, athletes and other influencers.”
Of the 90 letters, slightly more than half—47—went to influencers, according to the FTC.
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