Influencers and Transparency

Do we even need it?

With Influencer marketing yielding an average ROI of $6.85 for every $1 invested, it is no wonder why brands are increasingly hopping on this bandwagon. Among the different social media platforms available, Instagram has been the go-to platform for brands to reach out to their customers. The key reason being Instagram alone generates over 80 million photos and 3.5 billion likes daily. While it becomes increasingly integrated into the day-to-day lives of its users, there has been concerns over the lack of transparency.The main issue being:

How can users differentiate sponsored posts from organic posts?

 Lord & Taylor

This concern is well warranted given the recent slew of incidents. One example being Lord & Taylor which promoted one of its collections by giving 50 fashion ‘influencers’ the same paisley dress and paying them to post themselves wearing it on social media. The issue here is that these influencers did not disclose that they had received compensation or that this was a sponsored post.  According to the official complaint that followed soon after, this campaign had reached to 11.4 million users, received 328,000 engagements and eventually lead to the dress being fully sold out. The FTC settlement made it clear that Lord & Taylor is prohibited from misrepresenting paid ads as independent content and it must clearly disclose when influencers have received some form of compensation in exchange for endorsements.

Kim Kardashian

A more recent incident is that with Kim Kardashian and her selfie promoting the morning sickness drug, Diclegis. The Instagram picture which stated the drug’s benefits received more than 450,000 likes but was greeted with a letter of warning from the FDA as it claimed that the post was misleading and it failed to communicate any risk information in it.

Benefits of Influencer Marketing

For an advertiser, there is a huge benefit in working with influencers. Millennials are actively engaged on social media daily and it’s an efficient way to achieve greater reach as compared to conventional forms of advertising. In addition, given that fans usually react to social media posts, the greater engagement benefits both the influencer and the brands. This latest trend has led to some celebrities earning more from endorsements than from their work! It is no wonder why celebrities and influencers are becoming notorious for weaving paid posts into their feeds.

 So what is the Issue?

The crux of the issue is whether people deserve to know if they are being fed ‘organic’ content or sponsored content. With FTC stepping up efforts to remind celebrities to clearly identify their relationships with the brands, there are a welcoming number of posts accompanied with the hashtag #ad, #sp, #sponsored. These hashtags are meant to identify the post as a sponsored post so the audience is aware of their promotional nature.

While these efforts are welcomed, there are still cases where influencers are merely sharing brands they are a fan of. These are often gray areas as even though they are not receiving any form of compensation, they are still viewed as brand ambassadors by their audiences. As such they are encouraged to disclose if there is any relationship between the brand and themselves. While such posts are difficult to police disclosures are definitely a step in the right direction.

Given the benefits of influencer marketing on social media, it is understandable that brands might hesitate to use the hashtags #ad, #sp or #sponsored as they fear such disclosures would result in lower engagement. They might even believe that tactfully slipping sponsored posts amongst regular posts is an ingenious marketing technique. The surprising fact is that even posts with such hashtags performed well in terms of engagement.

when your lyrics are on the bottle ? #ad

A post shared by Selena Gomez (@selenagomez) on

This photo, which was marked as a sponsored post with a simple hashtag #ad, was a marketing boon for Coke, which collaborated with Selena Gomez for its “Share a Coke and a Song” campaign. The hashtag and image both made it clear that the post was a sponsored one yet it performed so well that it became the most popular celebrity post of 2016. It comes to show that the performance of a post ultimately boils down to the copy, visual and execution. Brands do not need to fear the disclosure of sponsored posts. In fact, they should embrace it as an opportunity to build an honest relationship with their consumers.

Moving on

With consumers facing over 3000 brands on a daily basis, there is an increasing need for brands, Influencers and Social Media Platforms to increase transparency in terms of disclosing the nature of their posts. Consumers have the right to know if they are viewing a sponsored post or an organic one. In addition, given a celebrity’s/influencer’s public profile, they have an increased responsibility for the messages they post online.

As the landscape of Influencer marketing evolves, it is important to ensure policies also evolve at an equal pace to continually protect the interests of consumers. While it is still a largely unregulated area, the current steps taken by the FTC is a good start. It is only time before such regulations become a common practice in countries like Japan, Indonesia, and Singapore where the Instagram culture is strong amongst its millennials.

Written by Kenneth Edward

Hey, everyone! I am currently serving as an Account Coordinator at Octagon, the world's top agency for sports entertainment marketing and talent management. Besides dogs and fine teas, I love all things marketing. It is my belief that good marketing not only educates, it engages and transforms. Shoot me an email if you have any questions. Thx!

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