Reiterating their concerns about online influencers, Public Citizen and three other consumer groups sent a second letter to the Federal Trade Commission requesting that the agency take action.
"Undisclosed paid product endorsements continue to persist as a serious problem on Instagram, and the [FTC] has yet to take action to enforce its policy, which states that paid endorsements should be identified with #advertisement or #ad," the groups wrote.
Public Citizen, Commercial Alert, the Center for Digital Democracy, and the Campaign for a Commercial-Free Childhood first wrote to the Commission in September and provided more than 100 examples of posts they claimed violated FTC policy, including some from well-known celebrities such as Rihanna and members of the Kardashian family.
In the most recent letter, the groups provided additional examples of undisclosed influencer posts on Instagram, and also identified a new area of concern for the FTC, so-called "micro-influencers."
Influencers with small followings and lesser-known celebrities are dominating the influencer market on social media, according to the letter, with a cottage industry developing to connect brands with average Instagram users. Two Web sites—Influenster and Bzzagent—send users free products in exchange for reviews and social media posts, the groups said.
When users receive a free sample, they are encouraged to post a photo to advertise the product to their friends and followers. The more promotional posts made by a user, the more free products they receive. But the companies fail to comply with FTC regulations, the groups told the agency. Bzzagent specifically instructs influencers not to post the correct disclaimers and use "GotItFree" or "GotACoupon."
"Undisclosed paid endorsements from average consumers represents a dangerous trend that the FTC must address, since people generally place more trust in recommendations made by their peers and have no reason to believe that their friends, colleagues and family are engaging in paid product promotion," the letter stated. "Thus, companies are preying off of the trust and relatability of smaller level influencers. We encourage the FTC to investigate Influenster and Bzzagent's disclosure policies and communication practices with influencers."
To read the letter from the groups to the FTC, click here.
Why it matters: The issue of which disclosures are necessary for certain posts by online influencers is not going away anytime soon. Social media advertising only continues to grow, while consumer groups have made it clear they will not drop the issue. "We again request that the FTC engage in an affirmative effort to change the culture around paid endorsements on Instagram, and that it act promptly and aggressively," the groups wrote in their most recent letter. "Enforcement actions should be taken against serial offenders, marketing agencies and endorsers that continue to violate FTC policy."