FTC Warns Social Media Influencers to Stop 'Stealth Ads'

The Federal Trade Commission has warned social media influencers that they must disclose the cash or compensation they receive in exchange for advertising a product.

The Consumerist reports that social media influencers have been warned by the FTC that they must disclose when they are paid to promote a product or brand within their content. The FTC reportedly sent out 90 letters to influencers and the brands that use them to advertise their products, warning them that they must follow the FTC’s guidelines on paid endorsements.

The FTC did not disclose which influencers or brands were contacted but did provide a copy of the template letter that was issued, which includes multiple reminders of rules for influencers to follow. “Consumers should be able to notice the disclosure easily, and not have to look for it,” 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. ”

The letters sent today are a direct response to a petition filed last year by a group of consumer advocates called Public Citizen who wanted to bring the FTC’s attention to the thousands of influencers failing to disclose their relationships with brands.

“We live in an era where celebrities and average citizens are sharing every detail of their lives on social media, from what they ate for breakfast to selfies featuring their ‘favorite’ products. It is often unclear whether an Instagram user is paid to post a product endorsement or if they genuinely use it,” said Kristen Strader, the campaign coordinator of Public Citizen’s Commercial Alert. “That’s exactly why brands are using influencer marketing as a primary way to reach young consumers.”

The Campaign for a Commercial-Free Childhood also commented on the issue, saying, “We’re glad the FTC is encouraging influencers on Instagram to be more forthright, but we hope they expand that initiative to include YouTube and other social media, which reach millions of children and we hope the FTC will take strong action against any influencers who refuse to comply with the rules.”