FTC Coming Down on Celebrity Endorsements

allison-williams-notsponsoredAdvertisers are facing a new threat as the government calls out paid social influencers for what they are.

There is a new way to make a living online. “Social media influencers” with huge audiences are often sought out by brands and paid hefty fees to endorse products and services. And those endorsements are skating on very thin ice, according to the FTC, when they fail to adequately disclose themselves as ads.

“This uptick in celebrities peddling brand messages on their personal accounts, light on explicit disclosure, has not gone unnoticed by the US government,” explains this article by Sarah Frier and Matthew Townsend in Business of Fashion.

“The Federal Trade Commission is planning to get tougher: Users need to be clear when they are 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 is a move that could make the posts seem less authentic, reducing their impact,” the article continues.

Meanwhile, brands are pouring vast amounts of money ($225 million a month on Instagram alone according to Capitv8) into celebrity social endorsement, and the protocol for identifying the content as ads is sketchy at best.

Last year the FTC announced stricter standards for native ads, and now they turn their sights to this social endorsement phenomenon.

“We’re not calling up each individual ad agency,” said the FTC’s Michael Ostheimer. The article notes that “[the FTC] will also continue to go after the advertisers with legal action. While it has not charged an influencer for deceptive advertising, it has not ruled that out.”

Are you paying social influencers? Ask yourself if the typical viewer would easily identify your piece as an ad. If not, do a better job labeling it. And be warned; Snapchat users are basically clueless when it comes to identifying a paid post.

Meanwhile, back in print land, magazine ads are still a welcome part of the reading experience. #JustSaying