Instagram Ad Disclosure and the FTC



I wrote last year about the new Federal Trade Commission rules that mandated social media influencers explicitly disclose sponsored posts with identifying hashtags such as #ad or #sponsored.

The social media business model here is simple:

  • Amass a large following
  • Get sponsored by brands to either mention their product (i.e., on Twitter or YouTube) or wear / display the product (on Instagram or Snapchat).

Even 10 years ago, “social media influencer” was a foreign concept, let alone a legitimate path to riches for some entrepreneurial teenagers and 20-somethings.

As with most things, U.S. regulations and laws have lagged behind this relatively new phenomenon.

Here’s the rub, though.

The FTC clarified its rules a year ago — even if it’s just a photo, ads should be clearly labeled as such.

From the jump, enforcement was always going to be difficult, as it’s not necessarily easy to prove whether an influencer was paid to mention a brand or is simply a genuine fan.

Even more difficult is monitoring and building a case about undisclosed sponsorships on Snapchat, where posts are deleted after 24 hours.

The question, then, is how are social media influencers complying with the new FTC rules?

To answer this, a new report from marketing firm Mediakix analyzed the posts from Instagram’s 50 most-followed celebrities over the course of the month.

Compliance? Or Not?

The verdict?

Fully 93 percent of posts promoting a brand were not in compliance with FTC labeling guidelines.

This is bad news.

Such rampant non-compliance indicates that enforcement thus far has been so lax that neither the influencers themselves, nor their legal counsel, deems sponsorship disclosure a priority.

As an article in The Verge on this same study pointed out, social media influencers came under intense criticism this spring for widespread promotion of the Fyre Festival, which, well…was aptly named, as it turned out to be less a celebration than a dumpster fire.


Snapchat – Losing Its Luster?

On a separate note, I think Snapchat will eventually fade (as did Vine) in favor of Facebook-owned Instagram (which continues to adopt Snapchat’s features) and more traditional video platforms like YouTube.

News this month is that downloads of Snapchat have fallen drastically in the last quarter– SensorTower, a company tracking the popularity of mobile apps, showed that downloads of Snapchat have fallen by 22 percent in the last two months.

Downloads on Apple’s iOS platform have been even worse, declining by more than 40 percent in the first two months of the second quarter.

Last week’s Snap’s IPO price dipped to its IPO level of just $17 a share.

Where will this all go?

Will Snapchat rebound in popularity?

Will it be acquired by a rival?

I’m not sure, but it’s fun to watch in the meantime.

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