Celebrity social media accounts are ripe for FTC action if they fail to conspicuously disclose their relationships to brands when endorsing or promoting products.
An evaluation of the 50 most followed celebrity Instagram accounts found that 93% were not FTC compliant and could be considered misleading. The Endorsement Guidlines that the FTC updated in 2015 state:
[I]f there’s a connection between an endorser and the marketer that consumers would not expect and it would affect how consumers evaluate the endorsement, that connection should be disclosed. For example, if an ad features an endorser who’s a relative or employee of the marketer, the ad is misleading unless the connection is made clear. The same is usually true if the endorser has been paid or given something of value to tout the product. The reason is obvious: Knowing about the connection is important information for anyone evaluating the endorsement.
Over 90 letters were issued to celebrity influencers after a review of numerous Instagram posts which, according to the FTC, did not clearly disclose “material connections” to sponsors.
While the FTC has filed against brands directly in the past, this marked one of the first times that the agency has reached out directly to social media influencers. Despite these regulations, many influencers are specifically asked not to disclose commercial arrangements with a brand.In the statement the FTC said: “In addition to providing background information on when and how marketers and influencers should disclose a material connection in an advertisement, the letters each addressed one point specific to Instagram posts – consumers viewing Instagram posts on mobile devices typically see only the first three lines of a longer post unless they click ‘more,’ which many may not do.”
The regulatory body has a set of rules, which define how sponsored content should be highlighted.
The following are guidelines to keep in mind:
- Disclosures should be clear and unambiguous – hashtags, such as #sp or #partner may not be understood by consumers to designate an ad. Instagram recently announced a new feature intended to help users use a “Paid partnership with” tag on posts and stories.
- Disclosures should be easy to identify – disclosures should not be buried in a string of hashtags or late in a post where the consumer will have to click ‘more’ to view the disclosure.
- Disclosures in videos should be embedded – a disclosure within a video should be embedded right into the video rather than buried in a comment or caption to the video. YouTube has a feature that will embed a standard disclosure when the user clicks “video contains paid promotion” in “Advanced Settings.”