The Federal Trade Commission has been trying for years to crack down on stealth marketing campaigns that use celebrities and social media. Now the agency is trying a new tactic: Sending letters to so-called "influencers" that instruct them to clearly disclose when they are pushing a product.
In a news release on Wednesday, the FTC said it sent more than 90 letters to prominent Instagram users, reminding them to "clearly and conspicuously disclose their relationships to brands." The agency also warned that common disclosure tactics—such as including the hashtag #sp or putting a "sponsored" label near the bottom of a post—are not sufficient.
"[M]any consumers will not understand a disclosure like “#sp,” “Thanks [Brand],” or “#partner” in an Instagram post to mean that the post is sponsored," said the agency, adding influencers should mention a sponsorship deal near the top of a post.
The FTC did not identify the celebrities who received the letters. But one possible recipient is Kim Kardashian, who regularly endorses products in Instagram, and whose account was the subject of a FDA complaint in 2015 over an endorsement for a morning sickness drug.
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Kardashian, meanwhile, recently extolled the drug on Instagram once more. As you can see in the screenshot below, which shows her displaying an image of the earlier sponsored ad, Kardashian included the hashtag #ad to indicate it is a promotion.
In the past, the FTC has tried to promote better disclosure of social media sponsorships by publishing new guidelines for marketers to follow.
Last year, the agency filed a complaint against Warner Bros studio for failing to properly disclose it had paid the YouTube celebrity PewDiePie to promote a video game on YouTube, Twitter, and Facebook. Prior to that, the FTC has also targeted garment maker Lord & Taylor and an ad agency for similar offenses.
This week's announcement is significant, however, in that it suggests the FTC is prepared to take action against the celebrities who are making the social media endorsements, and not just against the brands that pay them.