The FTC Gets Tough on Sponsored Content

Sponsored-Posts-FTC

 

It’s getting harder out there for social media influencers. Facebook and the FTC are getting stricter about disclosure of sponsored posts.

Increased Facebook Transparency

First, as I noted weeks ago, Facebook forced greater transparency on sponsored posts by requiring the ultimate sponsor of an ad to be clearly identified, and allowing those sponsors full access to the back-end metrics regarding visibility and reach.

Simply put, no longer can brands pay Mashable or BuzzFeed for native ad campaign through Facebook that obscures their involvement.

For instance, earlier this year Goldman Sachs published an (anonymous) paid Facebook ad through The New York Times’ T-Brand Studio, while Chrysler did likewise through BuzzFeed.

FTC Crackdown

Then this week came the news that the Federal Trade Commission is requiring new transparency on paid celebrity posts through all of the major social media channels.

For instance, no longer can Snapchat superstar DJ Khalid rave about a certain brand of vodka or a young Instagram model gush about a new dress she was paid to wear without disclosure.

Here’s yesterday’s Bloomberg article that helped break the news.

The main points from the article are as follows:

  • Up to this point, the hashtag #ad was usually seen as sufficient, but that may be changing.
  • ”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.”
  • When it comes to video, the FTC calls for disclosure to be said out loud or displayed on screen.
  • Ultimately, the FTC says that any compensation, including free products, should be disclosed.

Implications

Required sponsorship identification could make the sponsored posts seem less authentic, reducing their impact.

In particular, it’s increasing regulation in a currently-unregulated (and very lucrative) market.

Brands already spending more than $255 million on influencer marketing every month just on Instagram (per Captiv8, a company that connects influencers with brands).

It’s normal for the government to take a while to catch up to new forms of technology.

That the FTC would eventually weigh in on sponsored posts and endorsements across such social media channels as Twitter, Instagram, Snapchat and YouTube was inevitable.

But prepare to see more lawsuits and lobbying on behalf of the current social media royalty who have gotten wealthy by giving great exposure to brands without necessarily clearly informing their fan base that they were paid to do so.

And, as PR practitioners, its key for us to keep tabs on these rules, so we can better advise our clients of how best to engage with social media influencers without running afoul of federal guidelines.

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