The Federal Trade Commission (FTC) announced yesterday that it recently sent over 90 letters to Marketers and Influencers to educate them about their use of Instagram to promote goods and services. According to the FTC, this was the first time that it had contacted Influencers directly to educate them about their use of social media.
It has become increasingly common for social media personalities, bloggers, artists, and athletes (Influencers) to post photographs of themselves on Instagram using and enjoying recognizable products and services. A selfie of a celebrity wearing distinctive jewelry or enjoying a particular brand of beverage may influence fans and followers to make similar purchases. Likewise, an Instagram post showing an athlete using a piece of athletic equipment can influence purchases.
What may be less clear to the fans and followers influenced by these "spontaneous" posts is that the posts may actually be endorsements for which the Influencer received something of value from the Marketer. A number of organizations including Public Citizen petitioned the FTC to take action against these sorts of Instagram posts. In its letters, The FTC reminded the Influencers and the Marketers that they must make a "clear" and "conspicuous" disclosure of any "material connection" between the Influencer and the Marketer if such a connection is not already clear from the context of the Instagram post. In some letters, the FTC provided examples of certain disclosures (e.g., "#sp" or "#partner"), which were meant to convey that a post was sponsored, to show that the disclosure was not clear.
A "material connection" is a connection that might affect the weight or credibility given to an endorsement by a consumer. It could consist of a business or family relationship, or monetary or other form of payment. For many Influencers, simply receiving free product may be enough incentive for them to post photos on Instagram of themselves with the product. While many Influencers may be surprised that receipt of free products can create the sort of material connection they must disclose, today’s announcement reinforced the FTC’s views on the matter.
The FTC specifically reminded Marketers of their responsibility to advise Influencers of their disclosure responsibilities and to ensure that their Influencers were, in fact, making appropriate disclosures. The FTC also recommended that Marketers review their social media policies and how they address the disclosure of material connections by Influencers.
While the FTC's Endorsement Guides are not new, its plain language regarding what is a clear and conspicuous disclosure in the context of an Instagram post is particularly specific in the letters and yesterday’s announcement. For instance, the FTC explained that consumers viewing Instagram posts on mobile devices often do not see beyond the first three lines of a post unless they click "more," which many will not do. When making endorsements on Instagram, Influencers should disclose the material connection above the "more" button.