FTC Looks to Crack Down on Non-transparent Social Influencer Marketing

Zoella is one of the best-known social influencers, but the FTC wants to make sure that when social media stars are being paid to have a positive opinion, they make it clear

Social media influencer marketing is becoming big business. As more kids (of all ages) build up significant followings on YouTube, Instagram, Twitter and other social networks, brands are proving keen to tap into their influence.

And influencer marketing agencies are making it easier than ever for them to do so. Typically, companies like The Blu Market and VOLTU (which officially launched just last week), aggregate a few thousand social influencers, each of whom is typically required to have at least 10,000 followers – though many have significantly more – and then mediate with brands to hire the influencer to promote their product. Often, the product is an app they are trying to drive downloads of, and typically, it will be a game of some sort, though other sectors, such as fashion, have been keen on going down the social influencer route.

But according to a report from Bloomberg, the Federal Trade Commission (FTC) in the US is planning a crackdown on social influencers who don’t make it clear when they are being paid to promote something. The report cites three instances involving Snapchat star DJ Khaled promoting a vodka brand; fashion lifestyle blogger Cara Loren Van Brocklin endorsing PCA Skin sunscreen; and “internet personality” iJustine posting Instagrams from an Intel event. In each case, the report says, there was no indication that they were being paid to do so.

It also references the Warner Bros. Home Entertainment Inc case, which the company settled with the FTC in August over charges that it paid internet influencers such as PewDiePie to promote the video game Middle-Earth: Shadow of Mordor by posting positive reviews, without disclosing that they had been paid to do so.

Part of the problem is the way in which the influencers disclose that they are being paid to endorse what they are endorsing. While the FTC is happy with #ad being used at the beginning of a post to flag the fact that what follows is promoted, it is not happy with #sp or #spon being employed to do the same job.
Going forward, the FTC says it will be putting the onus on the advertisers to ensure that they are compliant. Like most other “new” forms of marketing or advertising, this is a sign of social influencer marketing growing up and cleaning up.