Influencer marketing is a BIG deal today. With influencer marketing, we target well-known individuals. Their effect on the purchase decision is significant for some consumers (followers). Because of some abuses in the use of influencer marketing, stronger FTC influencer marketing rules introduced new rules.
Our past posts on influencer marketing include the following: Influencer Marketing: Coming of Age. How to Best Reach Influencers: An Infographic.
Why Stronger FTC Influencer Marketing Rules Are Needed
As far back as 2013, we asked. “Is It OK for Celebrities to Plug Products on Social Media?” Why?
Consider these observations from Nick Bilton, writing for the NY Times:
“Today, celebrities and people with large social media followings promote products, But often we cannot know if it’s an authentic plug. Or if they were paid to say nice things. Take Miley Cyrus, the pop star traveling around America promoting her new album. One morning, she posted on Twitter: ‘Thanks @blackjet for the flight to Silicon Valley!’ The details of the arrangement between BlackJet, a Silicon Valley start-up that arranges for private jet travel, and Ms. Cyrus are unclear. But Dean Rotchin, chief executive of BlackJet, said ‘she received some consideration for her tweet.’ Ms. Cyrus did not respond to a request for comment.”
So, these questions arise. Does a celebrity call out a product because they believe in it — without being paid? Or does the celebrity endorse a product because they receive payment?
Stronger FTC Influencer Marketing Rules Now in Effect
Because of ethical abuses, the FTC moved to set standards for acceptable influencer marketing.
Lawyer Jeff Brown gave his take on this issue for Advertising Age: “The FTC watches activity in social media channels. And it is prepared to take action against both advertisers and influencers if ‘material connections’ between an influencer and any promoted product or service are not clearly and conspicuously disclosed.”
To learn more, directly from the FTC, click the links:
- FTC Endorsement Guides: What People Are Asking. “Suppose you meet someone who tells you about a great new product. She tells you it performs wonderfully. And that it offers fantastic new features. Would that recommendation factor into your decision to buy? Probably. Now suppose the person works for the firm selling the product. Or receives payment from the firm to tout the product. Would you want to know that when you evaluate the glowing recommendation? You bet.”
- Guides Concerning the Use of Endorsements and Testimonials in Advertising. “The Guides represent interpretations of laws enforced by the FTC. They provide the basis for voluntary compliance by advertisers and endorsers. Practices inconsistent with these Guides may result in corrective action by the FTC. And this occurs if, after investigation, the FTC believes believe practices involve conduct unlawful by statute.”
- FTC Staff Reminds Influencers to Clearly Disclose Relationship. “The FTC reviewed Instagram posts by celebrities, athletes, and other influencers. As a result, FTC staff sent out more than 90 letters. And the letters reminded influencers and marketers to conspicuously disclose their relationships to brands when promoting or endorsing products through social media. They mark the first time that FTC staff reached out directly to educate social media influencers themselves.”
Click the image to read more by lawyer Jeff Brown.
I believe the FTC influencer marketing rules are more strict because the number of kids and teenagers who are exposed to social is increasing rapidly. Since kids and teenagers are more likely to become “followers” when they see the celebrities they favored are posting “vague advertisement” on social media. For most people at my age or above, I think we are quite sensitive about the brand names showing in the posts and photos those celebrities posts. I sometimes just automatically consider that the celebrities get paid for their posts even if they are not.
I agree with stronger FTC influencer rules because it can be misleading to a large audience of consumers. People who endorse products that are paid to do so should disclose that information because their words on the product are influenced by capital gain, while someone who purchases the product and tells their friend/colleague they had a positive experience/outlook with the product does not benefit from passing on this information and tends to give genuine opinions on products. This is a much more viable source when it comes to making a decision on buying a product.
Oh my god i can`t agree more! Especially in beauty society, the influencers are so important that businesses depends on them so much. The influencers usually have a youtube channel and they post videos about new products. Some of the new products are bought by themselves but more of them are sponsored by the beauty brands. What`s more, the businesses also always do collabs with the influencers to bring more revenue since they have so many followers and subscribers.
The FTC’s decision to strengthen influencer marketing guidelines is beneficial to consumers and influencers. This way, the communication between influencers and their followers isn’t vague, and their intentions and messages in the posts they make endorsing products are clear. Consumers, then, can understand that the post isn’t simply made by a satisfied customer, but someone being paid by the company to endorse a product–thereby changing how the consumer is influenced by the message.
I believe it is a great idea for the FTC to regulate these terms of celebrity endorsed products. It is very misleading for consumers to see a celebrity promoting a specific brand only to find out that the celebrity’s motive for the endorsement is only because he or she is getting paid. This then completely takes away from the quality and reliability of the product. It should be free information for the public and consumers to know whether or not a celebrity is being paid by an advertiser or if the celebrity is acting out of his or her own love for the product.
If I were a celebrity, I wouldn’t just endorse products for the fun of it. If I truly believed that the product I liked was the best thing Ive ever had, then maybe I would. These large companies are not lacking funds by any means and they should not be riding the coat tails of stars for free. It has gotten better, in terms of being able to tell if one is being paid to advertise. Its shown on top of instagram posts and most youtube regulations now make it mandatory to disclose and personal interests in products that are being promoted. These rules benefit the consumer and hurt the businesses.
This reminds me of the changes to sponsored videos on Youtube a while ago. Now Youtubers have to disclose in the video and/or in the description box whenever their video is sponsored. It would be interesting to know if individual companies started this influencer disclosing trend prior to the FTC or were forced to do so because of it.