Social media is full of celebrities talking about how they used a certain diet pill to slim down, mommy bloggers talking about the educational benefits of the latest kids toy and teens reviewing new video games. Getting social media influencers to mention a product is considered an excellent marketing strategy, however, the Federal Trade Commission (FCC) is cracking down on ambiguous paid endorsements by insisting the consumers are fully aware that the social media personality was paid to promote the product.
Celebrities with a large number of followers may earn a hefty salary by engaging in influence marketing, while other lesser known, but still highly influential YouTube stars may simply get free products to review. The FCC views all forms of compensation the same way, even a free tube of mascara given to a makeup vlogger is considered compensation, and it’s up to the advertisers to ensure that their endorsers comply. Lord & Taylor was recently cited by the FCC for giving free dresses to fashion influencers on Instagram, who in turn did not reveal that they were given the dresses and paid by Lord & Taylor.
Social media influencers typically include hashtags like #sponsored or #ad in their posts, however, when these hashtags are one of fifty different hastags, consumers don’t notice them. If someone is a paid endorser on video, they must say that the post is sponsored or the words must show on the screen. While many social media celebrities claim they only endorse products they genuinely like, the FCC isn’t buying it.