You know that famous Selena Gomez Instagram post where she’s drinking a Coca-Cola? Girl made a ton of cash for that and her followers (aka consumers) were none-the-wiser that the photo was an advertisement — in the U.S., it needs to be labelled #sponsored or #ad, to be fair game.
The U.S. Federal Trade Commission (FTC) has their eye on the actions of brands and influencers, working to integrate brands into celebrity and influencer channels without necessarily being upfront with consumers that integration is a form of advertising. It appears that the FTC is finally putting their foot down on non-disclosure.
The U.S. Federal Trade Commision has just made a bold move by targeting American celebrities, athletes, and other influencers who don’t label their sponsored content.
Here’s why disclosure matters:
For the longest time — for the entire time before digital and social media were invented — advertising was very obvious. People knew what journalism looked like and what advertising looked like, the two were very distinctive by comparison.
Ever since social media was invented, advertisements have had an invisibility cloak on them. The new ads are Instagram posts of Selena Gomez drinking a bottle of Coke, Kim Kardashian wearing a waist trainer and celebrities drinking Fit Tea (where on Earth did the Fit Tea brand get their marketing budget?) but the average person probably doesn’t realize those are ads and the celebrity made money for endorsing the product.
Those of us who work in advertising, marketing and publishing know that branded content has replaced traditional advertisements, like banner ads, because nobody really clicked on banner ads. Branded content can be really smart and powerful — we love writing it — but there has to be transparency so the audience know what’s going on, that they’re being marketed to.
If an audience doesn’t know that they’re being marketed to, they are less powerful in making informed consumer decisions. If people lose their power to make informed consumer decisions, they become increasingly vulnerable to corporate interests.
In simple terms, being vulnerable to corporate interests means you’ll spend your hard-earned money as they want you to, not as you want to. Do you want to be vulnerable to corporate interests? We don’t think so, and neither does the FTC:
So FTC sent 90 letters to celebrities, their agents and the brands they were publicizing and WWD obtained the notes. The top celebrities and companies that the FTC is ordering to comply with disclosure regulations include: Lindsay Lohan, Kourtney Kardashian, Scott Disick, Zendaya, Jennifer Lopez, Adidas, Chanel, Chiara Ferragni Collection, Johnson & Johnson, Eos Products, Saint Laurent and Puma.
When you take a deeper look into the topic of branded content, it’s clear that the solution will be much more complex than a #sponsored tag. There is a reason brands and influencers haven’t been doing that from the beginning, clearly identifying an image as sponsored content gives the audience an awareness brands don’t necessarily want them to have.
Before Beyonce broke the internet with her pregnancy announcement via Instagram in February, Selena Gomez held the crown for the most liked image on Instagram for that Coca-Cola ad.
This sultry photo of Selena was worth roughly $550,000 and disguised to look like a candid backstage photo. With 55 per cent of Instagram users being between the ages of 18 and 29, it’s clear that Millennials are the main market for this type of advertising.
It’s one thing to see Selena Gomez or a Kardashian drink Coke in their daily life and be inspired to invest in Coke because an influencer you admire invests in Coke, but it’s a completely different image when it’s not labelled as an ad that they’re being paid to execute.
Content marketing has become new strategic way of marketing and consumers have the right to know.