The Federal Trade Commission in the U.S. has sent letters to more than 90 celebrities, athletes, other "influencers" and marketers telling them that they must be honest about when they are endorsing products on social media.
A sample letter, posted on the FTC's website and signed by its director of advertising practices Mary K. Engle, sets out some of its "truth in advertising laws and standards," and says that any posts that have a "material connection" – those that are paid-for – must be "clearly and conspicuously" labeled as such.
One of its main concerns is over Instagram posts where viewers have to click the "more" button to see the full caption.
The letter states: "For example, consumers viewing posts in their Instagram streams on mobile devices typically see only the first three lines of a longer post unless they click "more," and many consumers may not click "more." Therefore, you should disclose any material connection above the "more" button.
"In addition, where there are multiple tags, hashtags, or links, readers may just skip over them, especially where they appear at the end of a long post."
Instagram is one of the most powerful places to reach consumers, and celebrities often carefully curate their posts to portray a particular lifestyle. Platforms such as NeoReach provide "influencer marketing" software that matches Instagrammers with products that they are paid to promote. NeoReach's influencer guidelines clearly state that any paid endorsements must be clearly labeled #ad or #sponsored.
Advertisers are spending increasing amounts on paid-for posts on social media, with expenditure going up 65 percent between 2015 and 2016, according to a report by technology company 4C in January. Instagram saw the highest level of growth, with spend up 138 percent, and the platform saw 100 million extra people joining in the six months to December 2016, growing its total membership to 600 million.
This is the first time that the FTC has written directly to those who endorse products on social media, it said in a post on its website.