FTC Warns Instagram Celebrities About Paid Ads: People Should Know Sponsored Posts Are Sponsored
The Federal Trade Commission has sent warnings to Instagram celebrities, prompting them to clearly state which of their posts are sponsored.
When following celebrities on Instagram, it can get tough at times to distinguish which of their posts are regular and which are paid ads. This could change soon enough, if the FTC has its way.
Instagram Celebrities, The FTC Is Watching
The FTC has sent more than 90 reminders [PDF] to Instagram "influencers" - meaning celebrities, models, athletes, and other Instagrammers with a huge following - asking them to be more transparent about their posts.
More specifically, the FTC wants influencers to start each post by clearly stating whether they have a "material connection" to endorse a product or service.
"The FTC's Endorsement Guides provide that if there is a 'material connection' between an endorser and an advertiser - in other words, a connection that might affect the weight or credibility that consumers give the endorsement - that connection should be clearly and conspicuously disclosed, unless it is already clear from the context of the communication," explains the FTC. "A material connection could be a business or family relationship, monetary payment, or the gift of a free product. Importantly, the Endorsement Guides apply to both marketers and endorsers."
According to the FTC, any such material connection should be clearly disclosed in the first three lines of a photo caption so that mobile users can see it without having to click "more." The FTC further points out that labeling sponsored posts simply by adding a sponsored post tag (#sp) or "thanks" followed by the name of the brand does not suffice, as the disclosure has to be clearer.
Instagram Sponsored Posts
For many influencers, sponsored posts make up quite a lucrative business. US Weekly notes that Kim Kardashian bags roughly $500,000 for an endorsement campaign, while Esquire notes that Instagrammers who have between 3 and 7 million followers can gain about $75,000 per sponsored Instagram post.
As social media advertising has seen tremendous growth, regulators have started looking into the practice to ensure advertisers are not misleading consumers. Instagram influencers haven't had a substantial set of rules and guidelines to properly handle the way they advertise products to their audiences, and that's where the FTC comes in.
FTC Closing In On Sponsored Posts
The FTC started making efforts last year to educate marketers and influencers alike, and now the new reminders follow up on those efforts. The agency did not reveal to whom it sent the reminders, but it did note that petitions filed by advocacy group Public Citizen played a role in the decision to send more than 90 letters calling for more transparency regarding sponsored posts.
At this point, the letters simply serve as a reminder or warning, but don't include any enforcement action. In the future, however, the FTC could launch a more serious probe if things don't change. It remains to be seen how things will pan out, but Instagram influencers are strongly advised to be clearer when making sponsored posts.
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