Influencer marketing’s meteoric rise hasn’t come without its share of growing pains. Most recently, the United Kingdom’s (UK) Competition and Markets Authority (CMA) launched an investigation into improper disclosure of sponsored influencer content.
The CMA’s crackdown isn’t the first attempt at regulating influencers. The UK’s advertising regulator, the Advertising Standards Authority (ASA), already has rules in place for paid influencer content. However, the CMA worries that these, as well as other consumer protection laws, are not being properly observed by influencers.
In the United States (US), the Federal Trade Commission (FTC) has established guidelines for influencer content paid for by brands. Platforms like Instagram and YouTube have also offered their own solutions to the issue, each launching “paid tags” to be used in conjunction with sponsored posts.
Intended as a luxurious event on a remote island of the Bahamas, the now infamous Fyre Festival quickly turned into a class-action lawsuit for its organizers. Lack of proper planning seemed to be the festival’s primary downfall, which reportedly left some attendees without food or water, and many stranded on the island. However, the event’s marketing has also been under scrutiny, and those who promoted the festival could potentially be named as defendants in the lawsuit. Furthermore, influencers who failed to disclose the sponsored nature of their Fyre Festival posts could face further investigation by the FTC.
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A Mediakix report from last year showed that more than 90% of top celebrity endorsements were not FTC compliant. Analyzing 152 ads among the top 50 Instagram celebrities, only nine posts were found to follow FTC regulations. The celebrities aren’t the only ones who can be held accountable for such violations, however. Both brands and media companies can face claims over failure to observe FTC guidelines. It’s clear that regulating influencers is an increasingly crucial component of the viability of commercial content on social media platforms.
The FTC sent out 90 letters to social media personalities and marketers, urging them to follow the rules regulating influencers. The letters came after reviewing public complaints about influencer posts on Instagram, and serve as the first examples of the FTC targeted individual influencers.
Truth in Advertising, a nonprofit dedicated to protecting consumers from deceptive advertising, claimed that Kim Kardashian West, her sisters, Khloé and Kourtney Kardashian, as well as Kylie and Kendall Jenner, violated FTC guidelines in dozens of their Instagram posts. Following the assertions, several posts by the sisters were either deleted or amended.
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While government agencies and nonprofits look to enforce rules, influencer marketing agencies help to prevent these errors before they happen. By regulating influencers and brands at the planning stage, influencer marketing agencies research and vet influencers, help to conceive and manage campaigns, as well as ensure sponsored posts follow the latest advertising guidelines.
There are a variety of ways that influencers can violate regulations. From improper and unclear disclosures, to editing or deleting sponsored posts, to failing to mention the paid nature of posts altogether, influencers can just be unaware, or downright intentional with their indiscretions.
Still, with millions of sponsored posts already on Instagram, it’s impossible for watchdogs to police all infractions when regulating influencers. However, even if watchdogs can’t enforce all online sponsored posts, the presence and warnings by these agencies create awareness within the industry. Moreover, the cases that do result in action show influencers and brands the potential consequences of non-compliance.
In recent years, agencies like the FTC, CMA, and ASA have expressed increasing concern about sponsored posts online, and their investigations indicate that more oversight is needed to ensure compliance with existing rules and regulations.
Government agencies and watchdog groups agree that disclosure and transparency are in the best interest of consumers. Transparent advertising also levels the playing field for both influencers and brands. With everyone playing by the same rules, more fair competition can proliferate.
Moving forward, the hope is not only that all influencers and brands follow proper rules and regulations around sponsored posts, but that how to handle these posts becomes more straightforward and ubiquitous. Different rules in different countries—as well as various solutions offered by a variety of platforms—have the potential to further confuse creators and businesses. Ultimately, an agreed upon list of influencer regulations and rules that crosses borders and spans platforms would be most useful for the worldwide network that so heavily relies upon this strategy.