Mike Froggatt, the director of intelligence for New York-based business intelligence firm L2 Digital, is taking on the ugly topic of influencer disclosure. He told WWD that “engagement is, indeed, impacted once money enters the equation, which comes as no surprise." But first," he says, "these content creators must tell followers which posts are sponsored.” This is where things almost always tend to get interesting.
To prove his central premise – that there is a direct correlation between sponsored content and declining engagement rates – Froggatt looked to a group of “superinfluencers,” including Chiara Ferragni; Aimee Song of Song of Style; Amber Clark of Barefoot Blonde; Arielle Charnas of Something Navy; Christine Andrew of Hello Fashion; Danielle Bernstein of We Wore What; Julia Engel of Gal Meets Glam; Julie Sariñana of Sincerely Jules, and Rachel Parcell of Pink Peonies, and their disclosure practices.
Implicit in Froggatt's mini-study is an interesting element: A look at which influencers are – and which might not be – regularly disclosing their sponsored posts. For the uninitiated, the Federal Trade Commission ("FTC") is an independent government agency tasked with promoting consumer protection and eliminating and preventing anticompetitive business practices. Its guidelines require that advertisers and influencers, alike, disclose material connections so that consumers can make purchasing decisions accordingly. This means that if a brand or retailer compensates an influencer to post about it or its products online, or to tag its products on Instagram, for example, that must be clearly indicated. #Ad and #Sponsored are common examples of such disclosure language.
TFL releases an annual study that specifically addresses this (you can see the most recent one here), but in the meantime, Froggatt found that “Julie Sariñana is the least likely to post with #ad,” which does not mean that she posts less sponsored content, but likely that she fails to properly disclose her sponsored posts.
Froggatt notes that Sariñana "is followed by Danielle Bernstein. For Bernstein, Froggatt said 4.6 percent of posts, or 34 out of 744, specified that content was sponsored." Up next: Chiara Ferragni, who used an #ad related hashtag 47 times in 1,000 Instagram posts during this period. “It looks like she didn’t start using it consistently until a Pantene ad in March, right around the time the FTC started cracking down.”
For Something Navy’s Arielle Charnas, the #ad hashtag was attached to 67 of 685 posts publishing during the same period, or 9.8 percent of her overall Instagram posts. Her posts featuring some form of an #ad hashtag had an average of 17.7 percent fewer interactions than her average post.
Ultimately, WWD writes that Froggatt "found drastic differences between those who identified paid content as such and those who 'forget' to include those pesky little hashtags that let their followers know when a post is sponsored," and with this in mind, "brands are consistently trying to develop ways to sidestep the whole #ad thing knowing those posts don’t perform as well," which can prove problematic ... and illegal.