Celebrities and key 'influencers' in the United States have been warned about their conduct when promoting products via Instagram, needing to make it clear to consumers when they are advertising.
The consumer regulator has sent letters to over 90 individuals and marketing firms to advise them of their legal responsibility to consumers. It is the first time that the regulator has felt the need to get involved and intervene on this issue, possibly linked to the statement made by an advocacy group who said Instagram had become 'a Wild West of disguised advertising'.
The Federal Trade Commission selected a sample of posts that they felt either indirectly referenced a brand or directly endorsed products. Its rules say that anyone endorsing a brand must "clearly and conspicuously" declare connections to it, for example, if products have been given free, if a payment has been made for the endorsement or if there is a business or family relationship. The rules apply to marketing agencies involved in such deals as well as the endorsers themselves.
The advocacy group named Public Citizen, which carried out its own private investigation last year, named celebrities such as Rihanna and Kim Kardashian who it said endorsed a product without disclosure.
"Instagram has become a Wild West of disguised advertising, targeting young people and especially young women," the group said.
"It is often unclear whether an Instagram user is paid to post a product endorsement or if they genuinely use it. That's exactly why brands are using influencer marketing as a primary way to reach young consumers. But without clear disclosure, brands are deceiving consumers and reaping the monetary benefits."
Points made by the regulator in the letters include:
- Some disclosures which had been made were not clear enough. It said that "#sp," (an abbreviation for sponsored), "Thanks [Brand]," or "#partner" in an Instagram post did not make it obvious to many people that a post was paid for.
- Instagram users on smartphones typically see just the first three lines of text on a post, unless they expand it. Therefore disclosures should be made high up in the post.
- When multiple tags, hashtags, or links are used, readers may just skip over them - meaning a disclosure may not be conspicuous.