It is often considered difficult for endorsers to make appropriate disclosures of their paid partnership with a brand within the confines of social media. Instagram has announced it will try to help make disclosures around paid endorsements easier. Both endorsers and brands could benefit.
New features will allow users paid to endorse or promote a product, or who receive a free product or other consideration from a brand, to tag the brand in their posts to disclose their relationship with the brand. If the brand confirms the relationship, the post will be marked as a “paid partnership with [brand name].” An incentive to brands to confirm the relationship will be the ability to track performance of content labeled with the paid partnership tag.
The new features are timely. The Federal Trade Commission (FTC) is focused on social media marketing. The FTC sent dozens of letters earlier this year reminding social influencers and marketers they are required to clearly disclose their relationships with brands in their social media posts to comply with the FTC’s Endorsement Guides. Some letters reminded recipients: “The FTC’s Endorsement Guides state that if there is a ‘material connection between an endorser and the marketer of a product—in other words, a connection that might affect the weight or credibility that consumers give the endorsement—that connection should be clearly and conspicuously disclosed, unless the connection is already clear from the context of the communication containing the endorsement.” The letters went on to say material connections could be a payment, other consideration like free products, or a business or family relationship. The FTC has always been concerned with both missing and present but inadequate disclosures of a material connection. According to the recent letters, examples of inadequate disclosure on social media include a hashtag not sufficiently informative (like #sp or #partner), or disclosures buried in a long list of hashtags where they tend to get skipped or missed by viewers.
Instagram’s new functionality could help alleviate some such disclosure issues, but the company has publicly cautioned it does not guarantee legal compliance. Users of the platform are responsible for their own legal compliance. At a minimum, the new features will hopefully be a good reminder that endorsement disclosure obligations apply. To be clear, Instagram’s new features are not in response to FTC focus on social media; the company has publicly indicated the features are its own initiative.