In April this year, we wrote about the phenomenon of the social media influencer – usually a celebrity or person with a large social media following who is paid to mention certain products and services, either in money or in kind. We postulated the legal ramifications of this modern form of advertising for brand owners, both internationally and in South Africa.
The obligations on influencers and marketers, in the USA at least, are contained in the USA’s Federal Trade Commission (FTC)’s very specific guidelines which state that any material connection between an advertiser and endorser must be disclosed in a clear and conspicuous manner.
The issue is one which remains in the spotlight and the FTC has since reported having addressed head-on certain non-compliant social media posts, as well as posts where the FTC was unsure as to whether any relationship existed and ought to have been disclosed.
In a press release earlier this year, the FTC stated that “After reviewing numerous Instagram posts by celebrities, athletes, and other influencers, Federal Trade Commission staff recently sent out more than 90 letters reminding influencers and marketers that influencers should clearly and conspicuously disclose their relationships to brands when promoting or endorsing products through social media.”
The FTC’s letters reminded influencers and marketers that a “material connection” between an endorser and an advertiser is a connection that might affect the weight or credibility that consumers give the endorsement and that this could include a relationship, sponsorship, payment or provision of free products.
The FTC has also seemingly become more specific with what is required to comply with the guidelines: “In addition to providing background information on when and how marketers and influencers should disclose a material connection in an advertisement, the letters each addressed one point specific to Instagram posts — consumers viewing Instagram posts on mobile devices typically see only the first three lines of a longer post unless they click “more,” which many may not do. The staff’s letters informed recipients that when making endorsements on Instagram, they should disclose any material connection above the “more” button.
The letters also noted that when multiple tags, hashtags, or links are used, readers may just skip over them, especially when they appear at the end of a long post – meaning that a disclosure placed in such a string is not likely to be conspicuous. Some of the letters addressed particular disclosures that are not sufficiently clear, pointing out that many consumers will not understand a disclosure like “#sp,” “Thanks [Brand],” or “#partner” in an Instagram post to mean that the post is sponsored.”In our April article, we had expressed doubt that Kim Kardashian’s use of “Thank you @jetluxlife!!!” in an Instagram post would comply with the guidelines and it appears that the FTC agrees. The FTC has declined to publish the names of the persons who received its letters so we will never know whether Ms Kardashian received her proverbial rap over the knuckles. Her more recent Instagram posts appear to comply with FTC guidelines which seems to indicate that she did:
The FTC has apparently sent follow-up letters to 21 of the original 90 contacted and, earlier this month, it reported that it had settled its first-ever formal complaint against two social media influencers Trevor “TmarTn” Martin and Thomas “Syndicate” Cassell who are widely followed in the online gaming community and who were charged with deceptively endorsing the online gambling service CSGO Lotto, while failing to disclose that they jointly owned the company. They also allegedly paid other well-known influencers thousands of dollars to promote the site on YouTube, Twitch, Twitter, and Facebook, without requiring them to disclose the payments in their social media posts.
The FTC has also updated its guidelines and has become even more specific in its advice to brands and influencers. For example, it advises that tagging a brand in an Instagram picture is an endorsement of the brand and requires an appropriate disclosure. The new information covers a range of topics, including Instagram and Snapchat disclosures, obligations of foreign influencers, disclosure of free travel, whether a disclosure must be at the beginning of a post, and the adequacy of various disclosures like “#ambassador.”
So what does this mean for South African marketers and social media influencers? Not much as it remains the case that our Advertising Standards Authority has not turned its specific attention to this issue. If you have been following the latest developments, it is understandable that the ASA has had other, more pressing issues to deal with. However, as mentioned in our April article, failing to disclose that a social media post is, in fact, sponsored in some way, would likely fall foul of both the ASA Code and Consumer Protection Act.
The bottom line remains that a social media post should not mislead a consumer to think that a celebrity or influencer is giving an unbiased testimonial when, in fact, they have an interest in supporting a brand – and that requires a clear disclosure of the relationship.
Kelly Thompson | Partner