Why won't influencers and brands listen to the FTC? They're not afraid of its fines

When influencers and renegade brands won't stop flouting the FTC's paid post guidelines, it's time for the government to rethink its approach.

"Instagram wants influencers to clearly label their paid posts." "FTC puts social media marketers on notice with updated disclosure guidelines." "Why those FTC blogger requirements aren't working."

Is anyone else feeling a sense of déjà vu? The times may have changed, but the headlines haven’t.

Since the Federal Trade Commission issued guidance on social media endorsements in 2013, media ranging from The Washington Post to Refinery29 have produced dozens of stories about the FTC’s attempts to regulate paid brand engagement with social influencers. Despite the passage of time and the varying perspectives on paid endorsements in the age of Instagram, the conversation hasn’t changed much during the intervening years.

Although the FTC has been consistent in its guidance that influencers should transparently disclose their material relationships to brands when being compensated to promote products through social media, enforcement has been less precise. With only a few exceptions, cases with strong penalties brought by the FTC against brands and influencers violating disclosure guidelines have been scarce.

In the latest round of notices given to companies including Chanel and high-profile social influencers such as Kourtney Kardashian, the FTC issued warning letters with few other negative consequences. If the issue of transparency in social influencer marketing is truly important, the educational approach and threats of real action hasn’t deterred many campaigns from flouting the rules.

When agencies and brands navigate the complex network of influencers and teams that have sprung up to manage their content, it’s not uncommon for the resulting ad campaigns to total six figures in expenditures—and these campaigns often stand to produce even more revenue in potential sales. Is the FTC’s approach of letters and small fines really enough of an incentive to change when so much money is on the line?

The FTC could level more substantial monetary fines that would force emerging brands and influencers to more seriously consider disclosure. For stronger measures to have an impact, the FTC needs to examine why brands and influencers are so reluctant to add "#ad" or "#sponsored" to posts. Is it because they fear it will ruin the influencers’ content and curb any viral potential? Or do they believe consumers are savvy enough to spot sponsored content without additional disclosure?

Given their positions in the marketplace, social platforms and brands may be in the best position to increase transparency with consumers. Instagram’s recent move to allow for influencers to more easily tag sponsored content, Twitch’s longstanding disclosure policies, and Electronic Arts’ requirements for a brand’s contracts with influencers all offer a more relevant and measureable path forward.

The FTC’s goal of ensuring that products and services are described truthfully online is admirable, but it may be time for it to concede that the social space has evolved too much for the organization to truly regulate it, unless it’s willing to take a real stand when influencers and brands break the rules.

Mitzi Emrich is a marketing and digital specialist at Sirius XM Radio. The views and opinions expressed in this article are solely those of the original author.

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