FTC Releases New Rules for “Influencers” aka Instagram “Celebrities”

Did you know that social media “influencers,” many on Instagram, can command thousands (some even with millions) of followers can make up to $1,000 per POST? Advertisers pay these social media “influencers” to use, wear, or praise their products in social media posts.

Image Source: powerfulmind.co

“Micro” influencers with 6,000 to 10,000 followers can even make up to $88 per post.

Influencers with 50,000 to 80,000 followers can get around $200.00 per post.

Accounts with over 100,000 followers (e.g., 250,000 to 500,000 followers) can earn at least $670.00 per post.

Those with over 1 million followers are often “in real life” celebrities. Mega-stars like Selena Gomez and Kylie Jenner can earn $800,000 and $1,000,000 per post (they both have more than 100 million followers)!

Believe it not, the Federal Trade Commission has regulations for these influencers.

The FTC had already published “Endorsement Guides.” But on November 5, 2019, the FTC released a new guide titled “Disclosures 101 for Social Media Influencers” specifically targeted at social media influencers.

The new guide cautions that a person who endorses a product through social media must conspicuously disclose any “material connection” she has with the brand. A “material connection” to the brand includes any personal, family, or employment relationship or financial relationship. An influencer should also disclose a relationship even if he or she is not paid money, but also if he or she gets anything of value in order to mention a product, such as free vacations or merchandise.

The guide encourages influencers to place a disclosure “so it’s hard to miss” and in close proximity to the endorsement message, rather than on “About Me” or profile pages, at the end of posts or videos, anywhere that requires a viewer to click for more, or mixed into a group of hashtags or links.

Companies, especially advertising companies, that “hire” influencers also have the responsibility to comply with the Endorsement Guides and can face enforcement actions from the FTC.

Image Source: reddit.com

So far, the FTC has not brought any enforcement action against influencers or customers of the company. Instead the FTC has only taken enforcement actions against advertisers, ad agencies, public relations firms, and other such companies. For example, in October 2019 the FTC settled charges with a company that sold fake followers to influencers and celebrities. The FTC alleged that the company sold more than 58,000 Twitter followers, 4,000 YouTube subscribers, 32,000 YouTube views, and 800 LinkedIn followers. According to the FTC, by selling fake followers, the company provided its customers with the means and instrumentalities to commit deceptive business acts or practices.

Was the FTC inspired by the Instagram Reality subreddit where people mockingly post often surreal, often hilarious Instagram v. reality photos?

What do you think? Should social media influencers be subject to some of the same rules as TV commercials or magazine ads?

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