Transparency In Influencer Marketing

Trouble In Marketing Paradise

In the era of social media, influencer marketing reigns supreme. Targeting social media users who have achieved influencer status in their respective niche allows marketers to pinpoint their target consumer base, often more cost-effectively than traditional marketing methods. However, all is not well in marketing paradise. Flaws have emerged which could deeply impact the effectiveness of influencer marketing as we know it.

Transparency has become a hot topic among brands and influencers alike as they risk losing the trust of their consumers. Furthermore, many influencers are now encountering legal ramifications for noncompliance with vague marketing regulations few are aware even exist. In this blog post, Hollywood Branded examines the current legal issues surrounding transparency in influencer marketing.

Violating Federal Trade Commission Truth-In-Advertising Laws

Influencers hail from a broad array of professional backgrounds and often have little to no knowledge of proper professional marketing practices. As such, several influencers and their sponsoring brands have recently come under fire for posting ads on social media without notifying consumers that the post is sponsored. Not only is this lack of transparency damaging to consumer trust, it is also violating Federal Trade Commission truth-in-advertising laws.

The FTC mandates that all sponsored posts clearly indicate that they are paid advertisements. They also list that influencers should not review a product unless they have actually used it, and should not write positive reviews for products they did not like. Sponsorship notifications should be posted before the ‘read more’ cut-off. How exactly this is done is left up to the influencer, which is where things become muddled. Typically, influencers will use hashtags such as #ad or #sponsorship if they do not mention the sponsorship in their initial post description.

The FTC recently addressed 90 major influencers in violation of TIA laws. However, the sheer volume of influencer marketing posts makes it more than likely that many offending posts will never be fixed. The FTC can only manage so much. It is, therefore, the responsibility of the agency or brand to educate affiliated influencers, and mandate the structure of the content when contracting the influencer.

Risking The Consumer Base

There is, of course, far more at stake for marketers than simple legal compliance. Losing the trust of influencer consumers risks the marketing method’s effectiveness as a whole. Some influencers have fired back that being transparent costs them followers because people view sponsorships as ingenuine. However, what’s worse: openly disclosing an honest sponsored review, or having it revealed down the line that you were paid to do a review and were not upfront about it?

To reiterate, the FTC mandates that influencers only review products they have actually used and enjoyed. It is the responsibility of the brand or agency to find influencers who may enjoy their products. But it is ultimately the influencer’s responsibility to decide whether or not they can or, more importantly, should write an honest good review.

Consumers are primarily attracted to influencers with perceived authenticity. Being upfront about marketing practices and the legal obligation to avoid ingenuine reviews would reassure followers that they are not being deceived even when money is involved. To do otherwise would risk not only the image of the sponsoring brand, but also the influencer’s own brand, platform, and integrity as a reliable, genuine spokesperson on social media.  

Traditional hashtags, while generally accepted, are inconsistent in practice and can vary widely enough that they may not always be recognized. For example, some influencers may use #sp instead of #sponsorship, or some other variation thereof. As more and more awareness is raised on the subject of influencer and marketing transparency, some social media sites like Facebook and Instagram have incorporated tools into their social media platforms to better help with sponsored transparency consistency.  

Instagram has since added a Branded Content tool which allows influencers to display an official “paid partnership” message across the top of their post, directly under their username. This way the sponsorship is displayed consistently in the same manor and position for every influencer across the platform. The partnering brand will also be tagged.

To sweeten the deal for brands even further, tagged businesses are granted access to Facebook and Instagram insights and metrics for that post. Influencer marketing has previously been criticized on the marketer’s front because collecting conclusive data depended upon contacting the influencer to request the information. Instagram and Facebook are now enabling marketers to have more control over their data to better evaluate the effectiveness of their campaigns.   

The future of influencer marketing depends on the transparency of influencers. Brands and influencers alike must be aware of their legal obligations for sponsored posts, and the ever-improving platform tools available to them. Since influencers are generally not marketing professionals, it is important that brands help to educate affiliating influencers about their own legal responsibilities. When everyone is informed, everyone benefits. Always be sure to put transparency prominently on the table in your future influencer partnerships.

Want to learn more about the ins and outs of influencer marketing? Check out these other blog posts we've written based on previous campaigns and experience.

• 3 Influencer Marketing Practices That Need To Be Left In 2018
• 3 Qualities To Look For In A Social Influencer
• 4 Things To Consider Before Launching An Influencer Campaign
• 5 Signs Your Brand Should Invest In Influencer Marketing

If you still feel like you have a lot to learn about influencer marketing (don't worry! many brands do) we also have an Influencer Marketing School you can enroll in today and become a certified influencer marketer!