Influencer marketing on Instagram is a thriving business. Influencers partner with companies from all different industries to promote products and services through their posts.
The problem is that many of these influencer marketing campaigns do not make it clear to followers that they are sponsored – violating the Endorsement Guides from the Federal Trade Commission.
In April 2017, the FTC sent out more than 90 letters reminding influencers and marketers that: “influencers should clearly and conspicuously disclose their relationships to brands when promoting or endorsing products through social media.”
In a nutshell, the FTC’s Endorsement Guides apply to both marketers and endorsers, stating that:
- Endorsements must be honest and not misleading, reflecting the real opinion of the endorser.
- If there is a “material connection” between an endorser and an advertiser (something that might affect how consumers view its credibility), it must be clearly disclosed. This material connection could be a monetary payment, a gift, or a business or family relationship.
- No special wording is necessary, as long as posts communicate the essential information. An effective disclosure could simply say: “Company X gave me this product to try…”
Some of the FTC’s letters pointed out that, even if sponsorship relationships are disclosed in Instagram posts, consumers might not understand what they mean. For example:
- If users are viewing Instagram posts on mobile devices, they’ll usually only see the first three lines of a longer post. To see the whole caption, they have to click “more,” which many people don’t do. So influencers should disclose any material connection above the “more” button.
- When multiple hashtags or links are used, especially at the end of a long post, users might skim over them. A disclosure placed inside a long string like this is probably not conspicuous enough.
- Some disclosures on Instagram posts aren’t clear enough for users to understand. A disclosure that says “#sp” or “Thanks [Brand” or “#partner” isn’t sufficiently clear to tag sponsored content.
Instagram itself defines branded content as “a creator or publisher’s content that features or is influenced by a business partner for an exchange of value (for example, where the business partner has paid the creator or publisher).”
Instagram requires creators and publishers to tag business partners in branded content posts. The app has also added new features that allow influencers to tag brands in sponsored posts through advanced settings:
Certain accounts can mention a business partner when they share branded content as a post in feed or in a story. This means that they have a commercial relationship with the business partner that’s mentioned, and that they were compensated in some way for the post. People will see Paid partnership with… above these posts.
The bottom line is that both marketers and influencers are responsible for clearly labeling sponsored content on Instagram, ensuring that consumers have all the information they need to make knowledgeable decisions.
Learn more about MtoM’s influencer marketing expertise