June 26, 2017
Investigation Shows That FTC’s Reminder Letters Are Ineffective at Disclosing Paid Posts on Instagram
Groups to the FTC: Enforcement Action Needed to Change Influencer Behavior on Instagram
WASHINGTON, D.C. – Despite warning letters from the Federal Trade Commission (FTC), Instagram influencers and advertisers continue to violate agency mandates to disclose paid posts, an investigation by Public Citizen’s Commercial Alert reveals.
In April, the FTC sent more than 90 letters to influencers and advertisers reminding them that paid posts must be clearly disclosed as advertisements. From May 1 to June 12, Public Citizen’s investigation tracked the Instagram activity of the 46 influencers who received a reminder letter from the FTC. Of the influencers who posted sponsored content, only one fully and consistently complied with FTC policy. While some users posted advertisements using a disclosure, the same influencers continued to post undisclosed content. In total, 327 (79 percent) of the 412 advertisements posted by the 46 influencers did not comply with FTC standards.
In light of the findings, Public Citizen, the Campaign for a Commercial-Free Childhood and Center for Digital Democracy sent a letter to the FTC today urging the agency to take affirmative enforcement action against influencers and advertisers that consistently post undisclosed paid product endorsements on Instagram. Influencers and advertisers are violating FTC policy and deceiving the millions of consumers who use Instagram every day, the letter says.
“Without consequences, influencers and advertisers have no incentive to follow FTC policy and be honest with consumers,” said Kristen Strader, campaign coordinator for Public Citizen’s Commercial Alert. “Our investigation indicates that the FTC’s reminder letters have been ineffective and enforcement action is desperately needed to protect consumers.”
The findings also reveal potentially harmful implications for young consumers. A large segment of the 46 influencers posted advertisements for fashion, beauty, health or fitness products for which young consumers are the target. Advertisements posted by “influencers” are designed to blend in with users’ normal content, making it nearly impossible for consumers to distinguish a marketing ploy from a genuine recommendation. For young women in particular, deceptive influencer marketing contributes to unrealistic and harmful standards of beauty and health.
The FTC’s reminder letters were a response to a letter (PDF) the three groups sent in November to the agency detailing more than 100 examples of posts that violate FTC policy and urging it to take enforcement action.
“Young and impressionable children look up to musicians, actors and athletes, and it’s unconscionable for marketers to prey upon that admiration deceptively to make profits,” said Josh Golin, executive director of the Campaign for a Commercial-Free Childhood. “We hope the FTC will take action to protect kids from this manipulative practice.”
Added Jeff Chester, executive director of the Center for Digital Democracy, “FTC decisive action is long overdue. Public Citizen’s research shows that FTC letters to influencers were ineffective. The FTC must now put a stop to nondisclosed sponsored content, especially to repeat offenders. The FTC must act on its mandate to protect the public – including our children – from unscrupulous marketers and advertising platforms, like Instagram.”
Read the letter (PDF).