Either the Federal Trade Commission (the government body that regulates everything from fur disclosures on garments to the rules for sponsored blog posts) isn't explicit enough in its guidelines or bloggers keep finding new ways to get around the rules. The latest: bloggers charging for Instagram posts. In its March issue, Australian Women’s Weekly highlights transparency (or lack thereof) in Australia’s fashion blogging industry; this includes the rates being charged by Beaconsfield, Australia-based, Ministry of Talent, a blogger agency that helps facilitate such services. According to the article, the highest rate charged by the agency is $850 for Sydney Fashion Blogger, with the cheapest O’Marge charging $150 for brands to be featured on the Instagram feed. The overall tone of the piece can be highlighted in a quote from Elle Australia’s deputy editor Damien Woolnough who noted: “Some of these bloggers skirts’ may be transparent but their business practices aren’t.” The problem: While Roxy Jacenko, founder of the two-year old, Ministry of Talent, says, "Our bloggers list on their blog posts if a post is paid," very rarely are paid for-Instagram posts labeled as "Sponsored."
Jacenko defended sponsored Instagram postings, saying: “I pose this – if Louis Vuitton took a full page advertisement in Harper’s Bazaar would they hope to receive cut through via product placement on the editorial pages of the magazine in the issue and subsequent issues in addition to their spend on the full page ad as part of their added value or ROI? Most certainly! Do you see fashion spreads and flat lay pages saying ‘SPONSORED’? No."
Interestingly, the article touches on a recent ruling by the Australian Consumer and Competition Commission which released new rules about disclosure and online product reviews with potential fines of up to $1.1m for breaches, but since it isn't a U.S.-based publication, the Federal Trade Commission's guidelines are not addressed, which is where I come in.
Essentially, the FTC guidelines that apply to blog posts and tweets likely apply to Instagram posts, as well. Last year, the FTC released n update to its existing guidelines, entitled “.com Disclosures.” Accordingly, "Bloggers receiving free products or other perks with the understanding that they’ll promote the advertiser’s products in their blogs [or social media accounts] would be covered [by the guidelines]." How do I know that social media accounts fall under the blogger disclosure guidelines? Well, according to the guidelines, disclosures must be "accessible on all platforms used." All platforms = your blog, your Facebook, Twitter, Instagram, Tumblr, etc. Further, in a statement released in connect with the updated guidelines, the FTC stated: "The FTC revised the Guides because truth in advertising is important in all media – including blogs and social networking sites."
A common argument in this context is that the role of the FTC is the promotion of consumer protection and the elimination and prevention of anticompetitive business practices, such as misleading consumers as to the connection between a blogger and a brand, and that no one is mislead because we all know that brands pay bloggers to wear certain things, blogs about certain things and attend certain events. However, that's not necessarily the case, especially when it comes to platforms, such as Instagram, where we are not used to see sponsored material. According to the FTC, "Many bloggers who mention products don’t receive anything for their reviews and don’t get a commission if readers click on a link to buy a product, and while the financial arrangements between some bloggers and advertisers may be apparent to industry insiders, it isn't apparent to everyone else who reads a blog. Under the law, an act or practice is deceptive if it misleads 'a significant minority' of consumers. So even if some readers are aware of these deals, many readers aren’t. That’s why disclosure is important."
So, moral of the story: To avoid legal ramifications, include a clear and concise "Sponsored" hash tag at the begging on your Instagram post if you are receiving any form of compensation from an advertiser in exchange.
*This article was initially published in March 2014.