Instagram made headlines this past week when it announced its most-liked photo of all time, a shot of singer Selena Gomez posted to her account of her holding a Coca-Cola bottle. The problem: Instagram’s most-liked photo was probably illegal, as the 23-year-old is one of the faces of the brand’s “Share a Coke and a Song” campaign and charges roughly $550,000 per social media post. As Digiday noted in its coverage of the Instagram milestone, “The picture, however, isn’t a seductive selfie or a candid backstage picture, but is actually an ad for Coca-Cola.” An undisclosed ad, that is.
As we have told you many times in the recent past, posting endorsements (which may be as simple as posting a photo on Instagram) – that have come about as a result of a connection between the endorsing party and the underlying brand – without proper disclosure often amounts to a violation of the Federal Trade Commission (“FTC”) Act. The same is true for the posting of sponsored content (regardless of the medium). In particular, the FTC has held that in order to avoid violating the FTC Act by way of misleading or deceptive social media or native posts, promoting parties should use “#Ad”, “Ad:”, or “Sponsored” disclosures to indicate that a post or link within a post includes compensated content.
With this in mind, if a post – whether it be in a magazine, on a blog, or on social media – is the result of some form of compensation or partnership and is likely to appear to consumers as anything other than an ad, it requires a “clear and conspicuous disclosure” alerting consumers to the fact that it is an advertisement or other commercial message. Moreover, the FTC has held that “an act or practice is deceptive if it misleads ‘a significant minority’ of consumers. Even if some readers are aware of these deals, many readers aren’t. That’s why disclosure is important.” That is a pretty low threshold, arguably requiring disclosure in a widespread number of instances. This is particularly true when the medium being used is not a traditional one for advertising.
Having said that, disclosures in connection with social media marketing campaigns are crucial, as many of them are much more “native” in nature. (Note: native advertising refers to sponsored content that bears a similarity to the non-sponsored content that surrounds it, and the FTC has held that social media postings fall into this camp). Including a “#ad” or “#sponsored” designation alongside social media marketing content is far more crucial than for a traditional ad with clear branding, such as a Revlon ad in a magazine, as the latter is a far more straightforward advertising scenario, and consumers can clearly identify the Revlon ad as just that … an ad. It is often much more difficult for social media users to differentiate between native posts – such as those posted to Instagram.
So, what about Gomez? Well, a bit of research reveals that she has been paid by Coca-Cola to appear in its “Share a Coke and a Song” ad campaign. Without having her contract in front of us, there is no way to know whether she was paid to promote the campaign on social media or whether she was simply paid to appear in the campaign. However, the answer to that question, while it would be interesting to know, does not actually impact Gomez’s disclosure obligation. As we know, she has a connection or partnership of sorts with Coca-Cola – and was paid by Coca-Cola – as a result of the campaign. This, according to the FTC, is enough.
In fact, the FTC has provided guidance to this point, stating, “You have a financial connection to a company that hires you [as a brand ambassador or other similar role] and that relationship exists whether or not you are being paid for a particular [social media post or not]. If you are endorsing [a brand or product] in your [social media posts], your audience has a right to know about your relationship.”
One might make the argument here that Gomez’s face is on Coca-Cola campaigns and her partnership with Coca-Cola for the “Share a Coke and a Song” campaign has been in the news, and as a result, consumers will not be confused as to her relationship with the company. While this may, in fact, be as valid argument, there is one problem: the standard for confusion is low. As we mentioned, only a “significant minority” of consumers needs to be misled as to whether the parties have a connection and what the extent of that connection is.
So, brands, be careful. Monitor the social media postings of the celebrities that you hire, and make sure they are disclosing their connections. It could be the difference between being the subject of an FTC investigation and running a smooth, legal, complication-free campaign.
UPDATED (9/23/16): It turns out, Gomez's post was, in fact, the result of compensation, as the singer has since edited the post to include #ad. As we have told you in the past, while such retroactive "correction" of posts is lovely, in theory, it is almost certainly useless at this point in time. Because Gomez's post garnered millions of impressions within hours of being posted and a significantly decreasing number of impressions thereafter due to the nature of social media postings, Instagram posts, in particular - which have been quoted as having a roughly 2 hour life span - and how they are viewed. With this in mind, the buying behavior of consumers has likely already been affected by Gomez's posting of paid-for albeit undisclosed endorsements (exactly the type of behavior the FTC aims to prevent), making it so that the damage of such posts has already been done, so to speak, and will not be remedied in any significant capacity by the retroactive addition of "#ad" to such posts.