Snapchat star DJ Khaled raves about Ciroc vodka. Fashion lifestyle blogger Cara Loren Van Brocklin posts a selfie with PCA Skin sunscreen. Internet personality iJustine posts Instagrams from an Intel event. Missing from their messages: any indication about whether they’ve been paid.
This uptick in celebrities peddling brand messages on their personal accounts, light on explicit disclosure, has not gone unnoticed by the U.S. government. The Federal Trade Commission is planning to get tougher: Users need to be clear when they're getting paid to promote something, and hashtags like #ad, #sp, #sponsored --common forms of identification-- are not always enough. 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. It's a move that could make the posts seem less authentic, reducing their impact.
“We’ve been interested in deceptive endorsements for decades and this is a new way in which they are appearing,” he said. “We believe consumers put stock in endorsements and we want to make sure they are not being deceived.”
This means more cases like the one against Warner Bros. Home Entertainment Inc., which last month settled with the FTC over charges that it deceived customers by paying internet influencers such as PewDiePie – who has about 50 million followers on YouTube -- to promote the video game Middle-Earth: Shadow of Mordor with positive reviews, without disclosing that they were paid and told how to promote it. In March, the FTC issued a complaint against Lord & Taylor for paying fashion influencers to create posts about one of its dresses on Instagram, without disclosing that the retailer paid them and gave them the dresses for free. Any compensation, including free products, should be disclosed, the FTC says.
Companies have been pouring marketing dollars into social media endorsements, paying everyone from a Hollywood celebrity to a mom who regularly Instagrams her baby snuggling with a puppy. Reaching consumers, especially 20-somethings, is increasingly difficult because of television’s waning marketing power. Social media is where those dollars are headed with brands already spending more than $255 million on influencer marketing every month just on Instagram, according to Captiv8, a company that connects influencers with brands.
Personal endorsements are as old as advertising itself, and there’s always been abuse. So when the FTC highlights influencer marketing as having a disclosure problem, it can come across as unfair, said Stefania Pomponi, the founder of Clever Girls Collective Inc., a marketing agency that works with brands including Disney and Ford.