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Disclosure Of Paid Partnerships to Consumers

If a friend of yours tells you that he stayed at this spanking new hotel with 5-star facilities at 1-star prices, would you consider visiting it? Probably. Would you change your opinion if you knew that he was paid to tell you that? Well, you would probably have second thoughts. This is what many are basing their argument on with regard to the disclosure of endorsement deals between brands and influencers.

Gone were the days where brands could get influencers to publicise their products without disclosing any partnership. With pressure from the Federal Trade Commission (FTC) and Instagram rolling out the paid partnership tag, more enforcement is being done to ensure that endorsement deals between brands and influencers are disclosed to consumers.

In 90 letters issued to influencers, the FTC stated clearly that any “material connection” between brands and influencers be “clearly and conspicuously disclosed”. Pressure from the FTC led to Instagram rolling out a paid partnership tag in an attempt to standardise disclosure of endorsement deals.

Well, it has already been a few months since Instagram rolled out the paid partnership tag and while we have been seeing more posts with the tag, many influencers and brands are choosing not to get the tag displayed on their sponsored posts or simply making the disclosure as subtle and discrete as possible. The high-profile Kardashian/Jenner clan, especially, has long been under fire from TINA.org for not disclosing paid partnerships with brands. For brands and influencers outside the US, it is only a matter of time before the regulations are adapted internationally.

How influencers are trying to hide disclosures?

1. Use of ambiguous hashtags

Use of ambiguous abbreviations.

Some influencers use ambiguous hashtags like #spon or #sp within their captions, however, many consumers may not get the message as these are unofficial abbreviations for #sponsored.

2. Thanking partnered brand

Simply just thanking the brand.

Another method that has been commonly used to subtly disclose a partnership is to simply show gratitude to a brand.


3. Hiding #sponsored

Hiding #sponsored tag within comments.
Hiding #sponsored tag within a string of hashtags.

Others try to hide the ‘#sponsored’ hashtag within a long string of hashtags or in the comments. At first glance followers will only notice the first 3 lines of a caption on their feed and so will not be aware of the paid partnership disclosure among the many hashtags or comments.


Why is it being enforced so strongly?

The reason this issue has inflated greatly is because it misleads consumers by withholding information on the purpose, nature and context of a post. Without conspicuous disclosure, the posts seem to be presented as a testimonial rather than as a form of advertisement despite the influencers being paid to make their posts. This will mislead followers into thinking that their much endeared influencers use certain products because they truly favoured them over others. This lack of disclosure of a material connection affects a consumer’s opinion of the product, thus, resulting in them making uninformed decisions.

By letting consumers know that a post is sponsored, consumers can make more informed purchasing decisions by taking into consideration the material connection between the brand and influencer.


Why influencers and brands need not be so concerned?

For now, many brands may disclose partnerships simply because doing so meets the legal requirement, and helps them to avoid heavy fines and charges. But such disclosure really isn’t all that bad.

Disclosure of a material connection between brand and influencer shows honesty and transparency, thus, need not mean that consumers will see both parties in a negative light. As transparency is a quality that is greatly valued among Millennials and Gen Z, it will help to build a more positive brand sentiment and greater trust in the influencer.

Furthermore, most followers would be understanding of the fact that this is probably the only source of the influencer’s income if they were to dedicate so much time and effort in creating quality content for their followers. Health blogger @thehealthymaven puts this very nicely — “I work for my readers and get paid by my brands”.

The problem may however arise if a brand uses a poorly-suited influencer. Followers may form a negative opinion of the brand if they work with influencers who post content wholly unrelated to the brand. For example, it would be very unusual for a sporting goods brand to hire a makeup blogger as an influencer. It would not only target the wrong demographic, but it would make the influencer’s followers question why the influencer is suddenly creating sports-related content.

If you are still unsure about the sort of reception you might receive, you could simply hire influencers that are already organically posting about your products. Since the influencer already liked and used your products before, followers would not see the endorsement deal as your brand forcing the influencer to use your product, but simply as a partnership to work on more content regarding a common interest.

If unsure of the exact FTC regulations, do take a look at their guide here.

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