Earlier this year, the Federal Trade Commission issued dozens of friendly reminders to brands that they were potentially breaking advertising/endorsement rules by compensating Instagram “influencers” without being transparent about this sponsorship. According to a new report, this message apparently didn’t influence the influencers, many of whom continue to stealth-advertise to their followers.
Though the FTC did not publicly identify the recipients of these warnings, a coalition of consumer advocates was able to obtain the nearly 90 warning letters [PDF; 45MB] through a Freedom Of Information Act request.
Though the warnings involved bona fide celebrities like Luke Bryan, Sean “Diddy/Puff Daddy/P. Diddy” Combs, Naomi Campbell, Sofia Vergara, Heidi Klum, Victoria Beckham, and lots of people who were briefly well-known for acting like idiots on reality TV, the letters were sent to the various cosmetics, apparel, beverage, and electronics companies that had apparently compensated these people.
The letters reminded the brands that Instagram posts must adequately disclose any “material connection” between an advertiser and an influencer, and that these disclosures be “clear” and “conspicuous.” Merely burying “#ad” among multiple other hashtags is not sufficient. The same goes for a disclosure at the end of a very long caption that is automatically truncated by the Instagram app.
While the letters didn’t go directly to the Instagram influencers, one might hope and/or assume that warning recipients — including brands like Adidas, Chanel, Dunkin’ Donuts, Puma, and Popeyes — would pass this concern on to the celebrities who stealth-advertised their products.
Yet, according to a new report [PDF] from a coalition — comprised of Public Citizen, Campaign for a Commercial-Free Childhood, and Center for Digital Democracy — nearly every single one of the influencers identified in the warning letters continued to post Instagram ads without proper disclosures.
Over the course of six weeks, the coalition tracked the Instagram posts of the 47 influencers cited in the FTC warning letters. If a post was determined to be sponsored — i.e., if the poster appeared to advertising a product or brand — it was then analyzed for whether or not that post clearly disclosed the advertising connection.
In all, there were 412 such posts, and according to the report nearly 80% (327) of them failed to adequately disclose that they were stealth ads. And the influencers (or whoever is writing their captions) are apparently not all unaware of the need for disclosure. More than half the tracked accounts posted at least some sponsored content that adequately disclosed that it was an advertisement.
The Instagram posts cited in the coalition report range from more blatant endorsements, like Amber Rose’s expressions of affection for one particular fashion brand, or Naomi Campbell posting a photo of her luggage that also mentions and links to the brand:
Then there are those posts where the influencer owns the brand, or is a key part of a promotion. For example, Sean Combs has posted a lot about his various liquor brands while Luke Bryan has pushed a Cabela’s contest where the prize was to meet the country singer while on a trip to Alaska:
The most difficult stealth advertising case to make are what we call the “gala gown” posts, wherein celebs like Heidi Klum and Jennifer Lopez post photos of themselves before or during big events, all while mentioning the designer:
On the one hand, this is information that the celebrity will be asked by (and will gladly tell to) every reporter and photographer who asks over the course of the evening, so one could argue that these aren’t really ads since they provide info that their fans actually want to know. On the other hand, the celebrities are being compensated — at the very least, by receiving free clothing for the evening — and they are blasting out a brand, connected to their name and face, to millions of people. J.Lo alone has 67 million followers on Instagram; that’s more reach than any ad in any magazine in the world.
The coalition report points to a recent study by MediaKix, which looked at the 50 most popular influencers on Instagram and found that 93% of them are failing to disclose the sponsorship of their posts.
When reached for comment about the coalition’s concerns, the FTC said it has received the letter and is reviewing it.