WASHINGTON DC: Celebrities and other influencers who post content on Instagram have been warned by US regulators that they must fully reveal their relationship when they promote products on behalf of brands.
The Federal Trade Commission (FTC) last week announced that it has sent letters to more than 90 unidentified individuals and marketing companies, telling them that any endorsement should be "clearly and conspicuously" disclosed.
And the regulator made clear that it considered any material connection to include business or family relationships, monetary payment, or the gift of a free product. Importantly, the FTC rules apply to both marketing agencies as well as the endorsers.
This is the first time that the FTC has contacted social media influencers directly in order to "educate" them, as the FTC's statement put it, and the action was influenced by petitions filed by Public Citizen and other advocacy groups.
They had expressed concern that some celebrity endorsements on Instagram amounted to a form of disguised advertising and urged greater transparency.
But the FTC guidance went beyond requiring influencers just to be clear about any relationship they have with a brand, as it also set out how to improve the use of hashtags and links.
For example, consumers viewing Instagram posts on mobile devices typically see only the first three lines of a longer post unless they click "more", so the FTC urged influencers that any material connection should be disclosed above the "more" link.
The FTC also flagged that when multiple tags, hashtags or links are used, consumers may just skip over them, meaning that any disclosure is unlikely to be sufficiently conspicuous.
In addition, the regulator noted that some disclosures, such as "#sp", "Thanks [Brand]", or "#partner" in an Instagram post are not always clear to consumers that they refer to sponsored posts.
The new strict rules, which are enforceable, follow similar action taken by regulators in other digitally advanced markets – most notably in Singapore and the UK, where influencers are also required to provide prominent disclaimers.
Data sourced from Federal Trade Commission; additional content by WARC staff