The FTC Closes In on Influencers

(Photo Credit: Steve Gale/Unsplash)

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Being your #bestself isn’t as profitable when you have a big watermark splashed over your perfect #nofilter face.

The US Federal Trade Commission updated its guidelines on how influencers and celebrities (honestly, is there even a difference between them anymore?) endorse products on social media. Basically, a small visible “#ad” in the text beneath an Instagram post isn’t going to cut it anymore.

The Circle of Influence Tightens

It’s hard to estimate exactly how big the influencer marketing industry is, because who exactly constitutes an influencer is pretty fuzzy. Influencer Marketing Hub estimates the sector was worth around $16.4 billion in 2022, as did McKinsey. Influencers (or creators, another flavor of influencer that generates more original content) can make money directly from the various platforms they work on — YouTube, TikTok, and Instagram all have programs that let creators profit off the companies directly — but endorsements are where the serious money lies.

According to McKinsey, even relatively obscure influencers can bag a five-figure payday for a single post, and celebrities can go higher than six figures.

The FTC isn’t looking to limit influencers’ pay with its new rules, it just wants them to be a bit more explicit about the fact they’re getting paid to gush about those new sneakers they just “bought”:

  • Influencers won’t be allowed to use disclosures anywhere where there’s a chance an idly doom-scrolling user might not see them, which in essence means they’ll have to place their disclosures on their actual videos.
  • That could put a slight damper on influencers’ whole vibe, but it’s also a warning to brands that might want to get some 21st-century shilling done. “I think the whole influencer endorser landscape or environment [and] every party involved in it is on notice now,” Allison Fitzpatrick, a partner at law firm Davis+Gilbert, told The Wall Street Journal.

Red Tape Everywhere: New disclosure requirements are also making life miserable for Meta, which suffered yet another setback on Tuesday when the EU decreed that Facebook will need to ask users’ permission before showing them personalized ads. Mind you, judging by how much attention European web users pay to the cookie permission pop-ups they endlessly have to click through, it might not change their habits much.