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Spot the Paid-for-Promotion: What you need to know about influencer ads

Updated: Jul 7, 2023

The power of social media to drive influential word-of-mouth brand recommendations is being recognised by more and more marketers every day, which is why you might have been hearing a lot about influencer advertising lately. Influencer marketing involves paying celebrities (and often, lesser-known “micro-influencers” popular in smaller communities) to advertise products on your behalf. It’s a technique of artificially fostering these word-of-mouth discussions, so increasingly popular that Influicity reported that 86% of marketers they surveyed had implemented an influencer campaign in 2017.

A person holds up a phone featuring the Nike logo.

Brands and influencers alike came under fire last year, however, after a letter from consumer advocacy groups sent to the American Federal Trade Commission was published online. The letter warned against the spread of undisclosed advertisements on popular social media platform Instagram and included a list of examples where influencers hadn’t made it clear enough that they were being paid to advertise a product in their post. The letter referred to these undisclosed ads as “a dangerous trend that the FTC must address,” and urged for stricter guidelines on transparency.

But is it really necessary for influencers to make it patently clear that they’re advertising a product? Many marketers would make the point that audiences aren’t foolish. It’s easy enough to discern paid sponsorships, so why should more apparent disclosure be an issue?

While it’s true that the intelligence of audiences shouldn’t be underestimated, many of these online ads can be more difficult to distinguish than you’d think.

To see what I mean, let’s play a game of… spot the paid-for-promotion!

Below is a series of screenshots from influencers on Instagram. Some were paid to endorse products, and others are entirely non-funded posts. See if you can tell which are which…

A) Ryan Reynolds - Piaget watch

A screenshot of a social media post: Ryan Reynolds doing an influencer ad for Piaget.

What do we think? Is Reynolds’ post about Piaget paid for? Or was he simply sharing his experience of last night’s event with his fans?

Answer: Ok, this one might’ve been a little easy. It was: paid for.

B) Scott Disick - Buscemi shoes

A screenshot of a social media post: from Scott Disick.

What about this post from Scott Disick, of Keeping Up with the Kardashians fame? Has he been paid to post a picture of these Buscemi shoes? Or is he just sharing his excitement over a recent purchase with his audience?

Answer: Paid for. (Kind of.)

In this case, Disick was gifted the shoes from the company and made the post about them in return. Do sponsorship loopholes like this count as an ad?

C) P!nk - Mammoth Mountain

A screenshot of a social media post: from P!nk

How about this snap of Pink and her family at Californian ski resort Mammoth Mountain? Is she sharing her love for a favourite family holiday destination, or has she been paid to endorse it to her fans?

Answer: NOT paid for.*

*That’s as far as I can tell through some digging into Pink’s sponsorships.

D) Heidi Klum- Dunkin Donuts

A screenshot of a social media post: from Heidi Klum

Finally, what about this video of Heidi Klum dancing on the set of America’s Got Talent? American brand Dunkin Donuts may sponsor the show, but does that mean the visible cups in her social media posts are advertisements too?

So, fun and games aside, we need to know: why does influencer ad disclosure on social platforms matter?

It mainly comes down to context. When we’re watching TV and we see a famous celebrity showing off a product in an advert, we know it’s paid fiction because we’re in the designated commercial break and waiting for our program to come back on. We still make the associations between the product and celebrity the brand wants us to, but we always remain aware it’s not an authentic recommendation by the celebrity.

But when a celebrity posts a photo of themselves sporting a product on their personal social media account, those barriers between fiction and authenticity are much more blurred. We lack the framing of the commercial break and are left unsure whether someone we admire really does recommend a product, or whether we’re just being given a disguised sales pitch.

Let’s look at this more recent post on Ryan Reynolds’ Instagram account, for example.

A screenshot of a social media post: from Ryan Reynolds

Reynolds’ is sporting an expensive watch again in this one - but there’s no company name or brand mentioned. Having already seen the earlier post where his Piaget endorsement was more evident, we might be able to discern that this is also a part of that sponsorship campaign. But what if someone didn’t catch that earlier post? Or what if the watch happens to be entirely coincidental in this one? The lack of clear disclosure guidelines really muddies the waters on what we can and can’t trust.

Things can become even more troubling when sponsorships are taken on by “micro-influencers.” In their letter to the FTC, consumer advocacy groups wrote that “people generally place more trust in recommendations made by their peers and have no reason to believe that their friends, colleagues and family are engaging in paid product promotion. Thus, companies are preying off of the trust and relatability of smaller level influencers.”

An authentic recommendation certainly feels more valuable and reliable to us than something we know was paid for, which is perhaps why some marketers would rather gloss over the importance of disclosure. But at the heart of it all: consumers deserve to know when they’re being sold to.

So how should ads be properly disclosed?

In response to the controversy, the FTC sent letters to a number of influencers to warn them that publishing sponsored posts on their personal accounts without “clear and conspicuous disclosure” would result in a breach of rules. They also updated their endorsement guides with clearer directions on sponsored posts. Having received similar complaints on disclosure, the UK’s Contents & Markets Authority also published open letters to marketers as well as bloggers to urge transparency and updated their own guidelines. The CMA guidelines leave the method of disclosing ads mainly up to a company’s own judgment, provided they are always “clearly identifying or labelling paid promotions.” The FTC’s guidelines give more specific direction, so although they’re only US-specific, they’re worthy of consideration for UK marketers too.

Here are the things you really need to know about influencer ads:

  • Influencers must disclose their endorsement relationships with a business whenever a “material connection” with that business exists. A material connection can include everything from being paid, receiving a gift, or having a business or family relationship with the business. This means that if an influencer receives a brand gift, even with no obligation to endorse it, and chooses to post about it, its status as a free gift must be disclosed clearly to the audience.

  • Disclosure directions ought to come from the brand first, and passed along to influencers. If you’re considering paying someone for an online endorsement, that means you have to give clear instructions about how they should disclose the ad. The CMA notes, however, that “everyone involved in online endorsements is responsible for ensuring that paid promotions are clearly labelled or identifiable as paid-for content.” This means that if you’re an influencer who hasn’t been given clear disclosure instructions, then you should reach out to your partnered brand for them, or write the disclosure in yourself.

  • A common practice among many influencers is to include a hashtag like #spon, #paid, or #partnership on endorsed posts. But according to the FTC, that’s not enough. The only two FTC approved hashtags to use for disclosure are #ad and #sponsorship, which they argue leave little room for interpretation that an influencer is working with a brand. These tags must also be clearly noticeable by users, and not buried in between dozens of other tags, or hidden below a “read more” line.

A screenshot of a social media post: from steffyspandcs

  • There is another option if you don’t want to use #ad or #sponsorship in your caption. The FTC has also approved the use of unique partnership hashtags that use both the brand name and partner in the tag, writing on Twitter that “XXPartner should be good enough when XX is [the] brand name.” Airbnb, for example, has started asking its sponsors to include #airbnb_partner in their captions.

  • Tagging a brand in a post is also considered to be an endorsement by the FTC, and as with any of the other examples, this requires a clear disclosure. That means that taking a photo of a dress and tagging the brand who gifted it to you won’t be enough. You’d have to include a hashtag that clearly describes it as a gift, or includes one of the recommended tags. (Interestingly: they also indicate that ad disclosure must still be given in this scenario even if your relationship with a brand was in the past.)

It’s also worth noting that Instagram now has an inbuilt feature that allows influencers to “tag a business partner” at the top of their posts, making sponsorships clearer to audiences. This feature can be found by clicking “advanced settings” whilst on the caption screen, then scrolling down to a new “branded content” section. This will allow a “paid partneship” sub-heading to appear below the influencer’s username on the post.

A screenshot of a social media post: from roseellendix

This feature is a great step in the right direction for clear disclosure, though the FTC does note that these subheadings can be easily missed, so you should include a disclosure in the caption as well to be safe.

Most of these examples and guidelines revolve around Instagram, where influencer marketing is most common, but they broadly apply to other social media and online platforms as well. Whether it’s a blog post, a Snapchat story, or a guest article: the key is to be transparent.

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