The USA’s trade watchdog has issued a stark warning to a raft of social media influencers, including Emily Ratajkowski, Victoria Beckham and Scott Disick, regarding their paid-for product promotions.
The Federal Trade commission recently mailed out more than 90 letters reminding marketers and brand influencers and marketers that they must clearly disclose their relationships when endorsing or promoting products on social media.
Senior figures at big name brand, such as adidas, Chanel, YSL and Dunkin’ Donuts, also received warning after the FTC reviewed a selection of Instagram posts.
This is the first time that the FTC has reached out directly to educate social media influencers themselves.
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. 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.
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 FTC’s letters informed recipients that when making endorsements on Instagram, they should disclose any material connection above the “more” button.
An FTC spokesperson said: “The letters also noted that when multiple tags, hashtags, or links are used, readers may just skip over them, especially when they appear at the end of a long post – meaning that a disclosure placed in such a string is not likely to be conspicuous.”
Some of the letters addressed particular disclosures that are not sufficiently clear, pointing out that many consumers will not understand a disclosure like “#sp,” “Thanks [Brand],” or “#partner” in an Instagram post to mean that the post is sponsored.
The FTC’s letters were sent in response to a sample of Instagram posts making endorsements or referencing brands. In sending the letters, FTC staff did not predetermine in every instance whether the brand mention was in fact sponsored, as opposed to an organic mention.
The spokesperson added: “In addition to the Endorsement Guides, the FTC has previously addressed the need for endorsers to adequately disclose connections to brands through law enforcement actions and the staff’s business education efforts.
“The staff also issued FTC’s Endorsement Guides: What People are Asking, an informal business guidance document that answers frequently asked questions.”
The staff’s letters to endorsers and brands enclosed copies of both guidance documents.