Many Influencer Marketing Campaigns Lack Proper Disclosures on Payments; FTC Cracking Down

The Federal Trade Commission has released guidelines for disclosing sponsored social media posts. Yet many social media influencers and brands have not gotten the message.

Paid advertisements masquerading as innocent photos continue to abound. Informed readers likely find them annoying. Marketers may be especially annoyed, feeling they make the entire marketing industry look bad.

Are the Posts Paid Advertisements?

Sometimes posts are obviously paid advertisements; other times the relationship between the celebrity and the brand mentioned is unclear. BuzzFeed started a column Is This an Ad? to cite examples of possible paid endorsements that lack disclosures. In one, Beyoncé posted a photo of herself at a luxurious B&B on Facebook, mentioning @airbnb. Airbnb said it did not pay the singer for the post, but a source familiar with the situation told BuzzFeed News that Airbnb comped her rental fee. In another, influencer Jonathan Cheban posted an Instagram photo of himself with a Burger King Whopperrito with the odd hashtag #thekingpaidmetodoit.

Truth in Advertising, a nonprofit consumer advocacy organization, recently complained that celebrities Kim Kardashian, Khloe Kardashian, Kourtney Kardashian, Kylie Jenner and Kendall Jenner have repeatedly failed to disclose Instagram posts as paid advertisements. Offending brands include Puma, Fit Tea and Calvin Klein.

“By way of example, Kylie Jenner posted a Fit Tea ad on her Instagram account without indicating that it was an advertisement,”  the organization’s letter to family manager Kris Jenner states. “TINA.org has collected a multitude of examples of similar transgressions.”

The Kardashians appear to have retroactively edited some posts to add hashtags #ad following the publication of the letter, according to Mashable.

The Onus on Brands

The FTC is indeed cracking down. In one case, the FTC called out Lord & Taylor for paying 50 fashion influencers between $1,000 and $4,000 to share a photo of themselves wearing a dress from the company’s “Designer Lab” collection on Instagram, according to the FTC.

The agency will be putting the onus on the advertisers to make sure they comply, according to Michael Ostheimer, a deputy in the FTC’s Ad Practices Division.

“We’ve been interested in deceptive endorsements for decades and this is a new way in which they are appearing,” Ostheimer told Bloomberg. “We believe consumers put stock in endorsements and we want to make sure they are not being deceived.”

“If you are in the PR or influencer marketing industry, work with influencers or happen to be an influencer yourself, make sure you’re in-the-know when it comes to FTC disclosures,” urges  Jennifer Bateh of Clever influencer marketing agency.

Recommended Guidelines

The difficulty for PR and marketing is that FTC guidelines can be somewhat confusing, and interpretations can differ. Bateh offers these guidelines.

• Provide clear disclosure language at the top of each sponsored post. For lengthy posts of more than 300 words add a disclosure at the bottom.
• Use FTC approved hashtags #sponsored or #ad to indicate paid sponsorship on social media networks Twitter, Facebook, Instagram, and Pinterest. Don’t worry about the placement of the hashtags on tweets since they’re so short.
• Do not use #sp, #spon or #collab. They are not real words. Don’t make your readers guess. Use #sponsored or #ad.
• Some brands want to be in compliance, but hate the suggested FTC hashtags. Starting your caption with “I’m partnering with/I partnered with…” is acceptable.
• Stay up to date. Many blog posts reference the 2013 FTC guidelines. Those posts are outdated. Refer to the most up-to-date information: the FTC’s Endorsement Guides: What People Are Asking released in 2015. Bookmark this page and become familiar with it.

The real test is if consumers who saw the post realize the celebrity was compensated.

“If consumers don’t read the words, then there is no effective disclosure,” Ostheimer told Bloomberg. “If you have seven other hashtags at the end of a tweet and it’s mixed up with all these other things, it’s easy for consumers to skip over that. The real test is, did consumers read it and comprehend it?” Only then can the brand feel it has disclosed properly.

Bottom Line: Even though many sponsored social media posts are not properly disclosed as paid advertisements, that’s no excuse for brands conducting influencer marketing campaigns to deceive consumers. Some marketers may believe a post loses effectiveness if viewers realize it’s a paid advertisement. However, brands that fail to disclose payments to influencers risk condemnation from regulators and consumer groups, and loss of trust by consumers.