FTC Fires Warning Shot On Influencers

Marketers are pushing the boundaries on acceptable practices in their social media influencer campaigns – and regulators are pushing back.

This week, the Federal Trade Commission sent letters to scores of social media influencers and their advertising partners, warning them to follow the rules on consumer disclosure and transparency, or risk legal sanctions and fines.

The FTC sent 90 letters to undisclosed recipients following petitions from digital consumer advocates including Public Citizen, pointing out a number of violations in commercial posts by social media influencers.

In many cases, the letters took issue with ads appearing on sites like Instagram, which don’t include sufficient disclosures alerting consumers that they are paid messages.

Among other things, the FTC letters point out that material compensation can take a variety of forms besides cash payment, including gifts and free products.

It also reiterated that simple appending “#sp” (for “sponsored post”) to the list of tags on a post is insufficient – the disclosure must include the full word, like “Ad” or “Sponsored,” and must appear prominently in the post.

On that note, the FTC added that disclosures should appear in the first three lines of Instagram post to ensure that they are seen by consumers.

Although the FTC didn’t reveal the names of recipients, the original complaint by Public Citizen named celebrities including the Kardashian clan, David and Victoria Beckham, Anne Hathaway, Blake Lively, Bella and Gigi Hadid, Chrissy Teigen, Heidi Klum, Pharrell, Steph Curry, and Drake, among others.

This isn’t the first time the FTC has rapped social influencers and their sponsors after prodding by consumer groups.

Last year, the advertising watchdog Truth In Advertising Inc. filed a complaint with the FTC concerning numerous posts by the various members of the Kardashian-Jenner family.

The complaint pointed to more than 100 posts that violated the FTC’s rules governing consumer-marketing disclosures by failing to state they were being compensated by the companies.

In 2015, Kim Kardashian and drugmaker Duchesnay ran afoul of the FTC and FDA for failing to disclose that the social media star was being paid to promote Diclegis, a morning sickness drug.
But it’s not just Kardashians: also last year the FTC called out Warner Bros. for a social-media influencer campaign that didn’t clearly disclose the fact that the influencers were being paid to promote its “Lord of the Rings” video game, “Middle Earth: Shadow of Mordor.”

by Erik Sass, Staff Writer
Courtesy of mediapost