Crackdown Coming For Stealth Social Media Ads

We’ve seen Warner Bros. get in trouble for paying YouTubers to hype a new game without properly revealing they were paid, and we’ve seen Lord & Taylor caught paying Instagram influencers to shill for a new dress. Yet our social media feeds are still overflowing with celebrities and semi-celebrities pushing products without disclosing that they are receiving a paycheck to do so.

The Federal Trade Commission says it will put more pressure on advertisers to make sure they comply with regulations related to disclosures of paid media content, Bloomberg reports.

“We’ve been interested in deceptive endorsements for decades and this is a new way in which they are appearing,” Michael Ostheimer, a deputy in the FTC’s Ad Practices Division, said. “We believe consumers put stock in endorsements and we want to make sure they are not being deceived.”

In many cases, celebrities and internet stars who are paid for their endorsements of products on social media use hashtags, such as #ad, #sponsored, or #sp.

While these posters might believe these designations are enough, the FTC says it has quickly found that isn’t always the case.

According to Ostheimer, the hashtags are often missed by viewers, or they tend to be mixed in with other tags the poster has used.

“If consumers don’t read the words, then there is no effective disclosure,” Ostheimer tells Bloomberg. “If you have seven other hashtags at the end of a Tweet and it’s mixed up with all these other things, it’s easy for consumers to skip over that. The real test is, did consumers read it and comprehend it?”

To alleviate confusion over the sponsored content, the FTC suggests that any disclosures be made at the beginning of a message. When it comes to video posts, the agency believes disclosure should be said aloud or displayed on the video itself.

Some advertisers argue that this is much ado about nothing because the celebrities being paid to shill for these products are genuinely fans. But that doesn’t matter; if you’re getting paid to say you like something, you have to disclose that fact.

Additionally, a few high-profile gaffes have shown that some internet personalities are letting their sponsors put words in their mouths.


For example, while we don’t know if reality TV personality Scott Disick likes or uses Skinny Tea’s protein shakes, or if Naomi Campbell likes Adidas shoes, both celebrities failed miserably recently when posting about the products on Instagram.

Instead of sharing their personal thoughts on the products, they simply pasted copy — and instructions — provided by the marketing teams on their social media pages.

While missteps like these make it explicitly clear that the person was paid for the post, some advertisers say providing copy for the celebrity makes the post seem less authentic, reducing their impact, Bloomberg Reports.


FTC to Crack Down on Paid Celebrity Posts That Aren’t Clear Ads [Bloomberg]

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.