Instagram plans to introduce a feature this week that will make it easier to label posts as paid promotions, taking what it called “a step toward transparency” in an area that has drawn attention from U.S. authorities. Product endorsements have become more common on Instagram, owned by Facebook, as celebrities and others with large followings on the social network have struck lucrative deals to endorse products - often without disclosing the commercial nature of such posts.
As noted by Reuters, “Known inside the industry as "influencers," people promoting products are required under truth-in-advertising rules to tell fans about their compensation, according to the U.S. Federal Trade Commission (“FTC”). It is not clear how many do.”
Instagram said in a statement this week that it will enable users to add a "paid partnership with" label that would appear above the picture - and also in connection with their live Instagram Stories photos and videos. Users can already add such disclosures below a picture, but the specific language and placement of that language has led to continued issues with the FTC, which requires that disclosures be “clear and conspicuous.”
"As more and more partnerships form on Instagram, it's important to ensure the community can easily recognize when someone they follow is paid to post content," the company said. Per Reuters, “The label would be voluntary, Instagram said. The company added, though, that it expects the label to be used because some users requested it.”
Instagram said it would develop a policy about paid endorsements based in part on the feedback it gets about the label. The policy would include some kind of enforcement but the details are still to be determined, the company said.
The move comes after the FTC sent influencers, celebrities, and brands a strong message by sending 90 or so letters centering on the required usage of disclosures in connection with sponsored content, and garnering extensive press coverage in the process. The letters specifically took issue with allegedly undisclosed and/or improperly disclosed sponsored posts on Instagram – and the aftermath is continually developing, but not in a terribly promising manner.
While some of the celebrities targeted by the FTC have changed their ways – Diddy, for instance, has begun including #ad on posts about his vodka brand, Ciroq; actress Bella Thorne has taken to prominently including proper disclosure language in her posts; and models Nina Adgal and Emily Ratajkowski have started adding “#ad” and “#Sponsored” to their posts – most of the individuals named by the FTC are not disclosing sponsored posts in the appropriate manner (as set forth by the FTC in its letters) or making their connections with brands clear at all. A recent study by Mediakix revealed that some 93% of sponsored posts on Instagram are undisclosed.
Regardless of whether a company or individual was on the receiving end of a warning letter, the FTC’s letters signify that the government organization is, in fact, paying attention to undisclosed sponsored content, particularly on Instagram, and advertising/endorsing entities should take note.