Consumer protection agencies in the U.K. and U.S. are demanding that Instagram influencers explicitly disclose paid promotional posts.
Made popular by Instagram, influencer marketing is one of the most popular marketing strategies currently.
Influencers command as high as $500k USD to post about brands on their social media profiles. But the nature of how influencers and advertisers collaborate on ad campaigns is what has caught the attention of consumer protection agencies.
Sometimes, it is really difficult to tell some of these ads apart from genuine recommendations. For this reason, consumers may be tricked into buying things they otherwise wouldn’t have bought.
This is something consumer protection agencies work hard to guard consumers against.#US #FTC and the #UK #ASA have come down on influencers recentlyClick To Tweet
CSGO Lotto vs FTC
Last month, the Federal Trade Commission (FTC) settled its first ever case against two influencers for endorsing a gambling service called CSGO Lotto. The case was brought against gaming influencers Thomas “Syndicate” Cassell and Trevor “TmarTn” Martin.
This is after the FTC had sent out over 90 letters to various celebrities and marketers reminding them to “clearly and conspicuously disclose their relationships to brands when promoting or endorsing products through social media.”
Apparently, the two influencers are joint-owners of the lotto service and in a series of videos promoted the service to their fans without disclosing their ownership. In addition, they paid other influencers to promote the service without requiring them to clearly disclose that they were paid promotions.
In the settlement, the FTC ordered that Cassell and Martin must “clearly and conspicuously disclose any material connections with an endorser or between an endorser and any promoted product or service” for any future promotions.
“Consumers need to know when social media influencers are being paid or have any other material connection to the brands endorsed in their posts,” – Maureen Ohlhausen
In a separate action, the UK’s Advertising Standards Authority (ASA) asked TV personality Sophie Kasaei of “Geordie Shore” to remove a post she made about Flat Tummy Tea in March even though it was clearly labeled as an ad.
In the ruling by the authority, they upheld that the name “Flat Tummy Tea” makes the ad misleading because the product didn’t provide such health benefit.
“Flat Tummy Tea did not identify any authorized health claims on the Register relating to their product or any of its ingredients. Because the health claims in the advertising were not authorized on the Register, and the product name was therefore not accompanied by an authorized health claim, we concluded that it breached the Code.”