New Guidelines: Social Media Influencers Must Label Paid Content

Social Media Influencers Must Label Paid Content
New Guidelines: Social Media Influencers Must Label Paid Content

The Federal Trade Commission (FTC) has issued new guidelines on how social media influencers should disclose paid content. The FTC is the government agency responsible for enforcing the nation’s consumer protection laws.

They ensure that companies and businesses treat consumers fairly, and they have the power to take action if they find a company that is not complying with the law. 

The new FTC guidelines say that social media influencers should always disclose when they have been compensated to endorse a product or service. This is a big change from what companies and social media influencers have done in the past.

What are social media influencers?

These are individuals who, as part of their own personal brands, craft and produce content which is then uploaded to online platforms such as Facebook, Instagram and YouTube, among others. 

Their content is typically centred on an interest they have, such as style, sports or holidays, and is generally shared by large groups of people. "It's the middleman who holds the power," says Rowan Cooper. 

An equity analyst at London-based stockbroker Panmure Gordon, and also the author of the company's 15-page note titled: "Social media market dominated by Facebook, Google and Twitter." "The social platforms have essentially cornered the advertising market by having access to the billions of users using their platforms," Cooper told Observer.

Why is this happening?

Marketers and publishers want to increase visibility of their brands. According to Pew Research Center, online and mobile advertisers spent $45 billion in 2014. Part of the reason is the 'influencer economy' is developing. 

As Facebook's push for better mobile advertising options continues to advance, brands are increasingly using social media stars to help drive engagement and connect with customers. 

As websites need to generate more revenue to sustain, they are willing to pay more for better engagement rates. However, Facebook's self-regulation and cautious approach to creators makes it difficult for brands to attribute their advertising dollars. 

Facebook's solution is to encourage brands to declare whether their ads are paid, sponsored or were the recipient of an influencer's 'gift'.

The guidelines

On Twitter, content which can easily be identified as advertising will only be allowed on a minimum of 12 tweets over the past 30 days, according to the new guidelines. Facebook users can only post content which is clearly identifiable as advertising in the description box, Facebook said. 

YouTube, on the other hand, has upped its controls on videos where paid product placements are being promoted. Video creators will no longer be able to insert a sponsor's logo or product promotion into the video when the "parenting" category is shown. "YouTube has always been about creator self-expression.

Why is this a big deal?

As more influencers are posting about products, and brands are using them to market themselves, it's easier than ever to get confused. So-called "influencers" might create sponsored content, for example by showing their friends what they're wearing on social media. 

This isn't illegal, but it could potentially be construed as a breach of trust. Companies are already extremely cautious about promoting their products on social media, but they're now faced with a new regulatory maze – new guidelines that will require influencers to identify sponsored posts. 

Any changes that make it easier for influencers to tell consumers what they're really promoting could be a huge opportunity for brands looking to maximise their investment.

What about the influencers?

The rules also apply to social influencers who have not previously had their activities monitored, such as those who promote products and services for hire. 

Tackling Online Advertising Apart from Instagram and Facebook, the guidelines also stipulate that bloggers should clearly label the advertisement of which they are sharing on their social media profiles. 

Instagram has introduced a similar code of conduct last year, calling out influencers who appear in advertisements without claiming to be paid by the companies.

How to comply with these guidelines 

➤ Recognize that you can’t say you only recommend “affordable brands” if you get paid to do so by a brand. If the company is paying you to talk up their products, then you have to use the label “paid endorsement”. 

➤ Wait for your followers to complain if you are promoting their products and not simply recommending them, like you’re paid to do. 

➤ Apologize and keep your mouth shut about “paid endorsements” until it gets resolved. To ensure compliance, don’t even think of uploading a photo with a product if you don’t know if the influencer received payment. The Instagram police will find out. 

One quick fix As soon as you have identified an influencer on Instagram, you can see if they’ve ever done a sponsored post. Go to their profile and look at their hashtags.


With the arrival of social media, people are able to use this technology to connect, interact and learn from one another. But in the process of forming relationships with these social media influencers, people may end up becoming unwitting consumers of their products or their beliefs. 

The purpose of this research was to ensure that users are aware of this and aware of the type of content they are exposed to and the potential risks this could have.

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