The year of undisclosed fashion advertising and the FTC
2017 was an important year for Truth in advertising efforts. After targeting social media stars and celebrities with “educational” letters outlining the publication requirements of its sponsored publications, the Federal Trade Commission (“FTC”) – the government agency responsible for promoting consumer protection and ‘Eliminate and Prevent Anticompetitive Business Practices – issued additional disclosure guidelines, and settled a formal investigation it opened against two YouTube influencers.
Here’s a look at some of the major developments of the year in this space, as well as some of the journalistic efforts TFL has undertaken to shed light on this important area which concerns not only the requirements of federal law, but rights as well. of consumers….
1. The FTC is taking action against influencers and marketers on sponsored posts. In a landmark activity episode, the FTC announced that it is actually monitoring celebrities, athletes and other influencers on Instagram. According to a government agency statement, after reviewing Instagram posts from celebrities and influencers, its staff sent over 90 letters reminding influencers and marketers to clearly and visibly disclose their relationships. when promoting or endorsing products through social media.
1a. FTC Clarifies Rules, Sends Stronger Letters to Influencers and Celebrities. The FTC settled its very first case against individual social media influencers and sent a fresh batch of letters to nearly two dozen others.
2. The Federal Trade Commission answers common questions specific to influencers. In the wake of these increased actions involving social media influencers, the FTC hosted an influencer-specific session on Twitter to answer questions about how brands and influencers can ensure they comply with US laws. . The FTC’s questions and answers – including hints as to whether Instagram’s new “paid partnership” feature is a valid disclosure (hint: it probably isn’t) – are as follows.
3. In light of the continuing violations, what was the real effectiveness of the FTC letters? Who’s Afraid of the FTC? Few celebrities, influencers or fashion brands. With that in mind, the ramifications – or lack thereof – of the letters the FTC sent to brands and individuals challenging allegedly undisclosed sponsored posts on Instagram are certainly interesting.
4. Revolve built a nearly $ 1 billion business based on undisclosed influencer marketing. For Revolve – which was founded in 2003 by Michael Karanikolas and Michael Mente, both from tech, not fashion – influencer marketing is big business. According to Mente, up to 70% of Revolve’s revenue – $ 400 million in 2015 – comes directly from influencer support. And yet, you won’t be able to gauge this just by looking at photos that have Revolve hashtags on them. This lack of clear and visible disclosure is problematic when compared to federal truth in advertising laws in the United States and internationally.
5. The annual report on the brand and influencers: the good, the bad and the very problematic. The following list takes into account 19 of the most famous influencers in the industry – from the biggest names, such as Chiara Ferragni and Julie Sariñana, to the slightly less followed but still very notable, like Marianna Hewitt and Gala Gonzalez, as well as the brands they are associated with.
6. Brands and influencers are divided when it comes to sponsorship disclosures. It’s been several months since the FTC sent a strong message to influencers, celebrities and brands by sending out approximately 90 letters focusing on the required use of disclosures in relation to sponsored content, and garnering extensive media coverage in the process. Regardless of whether a business or individual has received a warning letter, the FTC’s ruling means that the government organization pays attention to sponsored content, especially on Instagram, and advertising / endorsement entities must take note of it.
7. What is really driving Instagram’s push for advertising disclosures? Calling it “a step towards transparency,” Instagram’s new disclosure option is likely a legal measure calculated to help the platform evade responsibility if – or when – the FTC decides to crack down not just on influencers. flouting the truth in advertising standards, but also secondarily. responsible platforms as well.
8. Not just an American issue, UK brands, influencers and publications also need to be disclosed. Social media influencers, publications and the brands they are associated with are finally called on on a larger scale for non-disclosure of material links, with the FTC in the US and the Advertising Standards Authority in the UK slowly starting to crack down on ethically questionable and often deceptive practices.
9. Why isn’t the FTC doing more to tackle undisclosed ads in fashion? With increasingly frequent warning messages and a lack of real enforcement action, the question remains: why isn’t the FTC really taking action? (Chances are he’s understaffed and busy with other more “pressing” issues, such as allegedly anti-competitive mergers of multi-billion dollar companies and endorsements involving pharmaceuticals.)
ten. Advertising or editorial: it’s the same in fashion. Vogue Arabia’s September cover was essentially an undisclosed ad. The preference of publishers to favor advertisers is certainly not a new practice in the fashion industry, but it nevertheless seems, for lack of a better word, disgusting, due to the lack of transparency that accompanies it. . Read: The average consumer – those whom advertising laws and journalistic ethics standards aim to protect – would otherwise have no idea.
11. Full fashion disclosure – or not. While much has been written about how the agency’s recent efforts may affect influencers and celebrities who get paid to promote specific products or brands in subtle ways, the FTC has made it clear that it has all areas of the fashion industry in the crosshairs. In other words, someday soon, the cover of the show you’re reading – in a glossy magazine, on a website, in an app – might look a little different.
12. Why does the fashion industry view truth in advertising as optional? For an industry that talks a lot about transparency, fashion regularly fails. This is demonstrated every time a publication presents a product that has been offered to them in exchange, of course, for preferential placement. The same can be said when brands ask editors to attend lavish events and distant preseason or couture shows, or when influencers endorse the giveaways they receive from brands without stating the true nature. of these articles.
13. Red Carpet Pay-for-Play and the legality of designer approvals. An interesting aspect of the red carpet that is often lost to the industry underdog is the secret, paid-for deals between celebrities and their stylists, and the fashion brands that perform and allow certain dresses to make it to those carpets. very noticeable reds instead. others. Such agreements, while otherwise perfectly legal, can venture into legal trouble territory because of federal truth in advertising laws.