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Social media stars face crackdown over money from brands

Consumer protection bodies in the UK and US are increasing their crackdown on Instagram “influencers”, in an attempt to rein in the big business being done covertly on social media.

Instagram’s popularity with young people, and women in particular – in April it reported 700 million members – has led to a roaring trade between marketers and so-called influencers with large and engaged followings. Members of the Kardashian family, who promote a range of products from “detox” tea to waist-training corsets to their tens of millions of followers, can reportedly command as much as $500,000 (£370,000) per post.

Elizabeth Olsen, who plays an influencer in the forthcoming film Ingrid Goes West, has attracted 745,000 followers since she joined Instagram for the first time in May, telling the LA Times: “Financially, it’s a brilliant opportunity. I was only hurting my opportunities by not participating.”

With many paid-for promotions not disclosed, the blurry line between advertisements and heartfelt recommendations has led consumer protection bodies to take action against influencers for pushing brands they have received payment from.

In the UK, influencers have had to identify advertisements with the hashtags “#ad” or “#spon” (sponsored) since 2014. In April, the UK’s Advertising Standards Authority (ASA) found the makeup blogger Sheikhbeauty to have breached the CAP Code for non-broadcast advertisements by failing to clearly label a post about a herbal detox tea brand as an advertisement.

This week the ASA ordered the reality television personality Sophie Kasaei to remove her own photo of the Flat Tummy Tea she had shared with her 1 million-plus followers in March.

Though Kasaei had appropriately labelled the image an advertisement, the ASA upheld two issues with her post in its ruling on Wednesday.

Kasaei’s assertion that the tea could reduce water weight was found to be in violation of rules for marketing containing nutrition or health claims. In the second part of the ruling, the name “Flat Tummy Tea” itself was found to have violated regulations because it did not make reference to a health or nutrition claim that was authorised on the EU’s register.

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Sophie Kasaei’s Instagram advert for Flat Tummy Tea.
 Sophie Kasaei’s Instagram advert for Flat Tummy Tea. Photograph: Instagram/Sophie Kasaei

A spokesman for the ASA said that a brand name, in an advertisement, cannot refer to health-related wellbeing without appearing alongside an authorised health or nutrition claim, “which Nomad Choice Pty did not provide us with”.

He said the ASA was not asking that Flat Tummy Tea change its name, but its ruling did “make it very difficult” for it to be used in an advertisement.

In recent years the US Federal Trade Commission (FTC) has also ramped up its efforts to get influencers to “clearly and conspicuously” disclose their relationships to brands. Letters from the FTC to celebrities reminding them of their obligations noted that many disclosures had not been sufficiently clear. “Many consumers will not understand a disclosure like ‘#sp,’ ‘Thanks [Brand]’, or ‘#partner’ to mean that the post is sponsored”, it said.

Last week the FTC was in contact again with 21 of the original group, who received letters seeking clarity about specific posts that had been identified as potentially non-compliant. Reuters reported that the models Naomi Campbelland Amber Rose and actors Lindsay Lohan, Vanessa Hudgens and Sofia Vergara were among those asked to respond by 30 September.

Despite the US agency’s efforts to bring influencers to heel, much “#sponcon” remains unidentified. Analysis of the 50 most-followed celebrities on Instagram by the US marketing firm Mediakix in May found that 93% of posts promoting a brand were not compliant with the FTC guidelines.

Instagram recently confirmed that it would soon begin rolling out use of a “Paid partnership with” tag to “more clearly communicate when a commercial relationship exists between a creator and a business”. It would be tied to the platform’s first-ever branded content policy, restricting the posting of sponsored content to accounts with access to the tag.

In the meantime, the FTC hopes that its first action against individual social media influencers, settled last week, will send a message to others.

On 7 September the American Trevor “TmarTn” Martin and the Briton Thomas “Syndicate” Cassell settled FTC charges that they had deceptively endorsed an online gambling service while failing to disclose that they jointly owned the company. The FTC had also alleged Martin and Cassell had paid gaming influencers between $2,500 and $55,000 to promote the company, CSGO Lotto, without requiring them to disclose the payments.

Under the settlement the pair would be liable for hefty fines if found to have broken FTC rules in the future.

Maureen Ohlhausen, the acting FTC chair, said consumers needed to know when influencers were being paid by the brands endorsed in their posts. “This should send a message that such connections must be clearly disclosed so consumers can make informed purchasing decisions.”

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