FTC will crack down on sponsored content

By

Kate Dingwall

Published
Apr 3, 2017

Celebrity social media feeds are about to look a whole lot different – the Federal Trade Commission (FTC) has announced that they will be cracking down on sponsored content, holding media companies accountable for any social media posts featuring undisclosed sponsorships.

The goal of this new crackdown is to stop deceptive advertisements, like celebrities and magazines touting a product they had been paid to promote without acknowledgment of the advertisement. The FTC is requiring that any sponsored content be clearly stated. 

Mary Engle, head of the FTC’s advertising practices division told the press, “Generally, it comes back to if they [influencers and publishers] are promoting a particular brand or product and if they have a financial or material connection to the brand, that should be disclosed. If they are creating the sponsored content, then yes, we will begin looking at them."

Sponsored content has become the norm in the advertising industry – non-profit Truth in Advertising estimates that over $250 million is spent on influencer marketing per month. Furthermore, a study by the Online Trust Alliance unveiled that out of these paid partnerships, one in four influencers were asked by the brand to hide the fact that they are being paid. 

While the FTC acknowledges there is nothing wrong with native advertising, the FTC is requiring any advertising content to make a clear differentiation between advertising efforts and editorial content/original social media content. 

The Kardashians, who receive an  average of $250,000 per sponsored post, were one of the first media entities to come under fire for not disclosing sponsored content. After an open letter by Truth in Advertising targeted the famous brand, the Kardashians began adding the hashtags #sp (for sponsored) or #ad to every post.