After reviewing numerous Instagram posts by various social influencers, Federal Trade Commission sent out letters reminding influencers and marketers that influencers should clearly and conspicuously disclose their relationships to brands when promoting or endorsing products through social media.

The letters were  regarding influencer advertising on Instagram, and Instagram posts reviewed by FTC staff. They mark the first time that FTC staff has reached out directly to educate social media influencers themselves.

The FTC’s beef is that if there is a “material connection” between an endorser and an advertiser that might affect the weight or credibility that consumers give the endorsement – that connection should be clearly and conspicuously disclosed, unless it is already clear from the context of the communication. A material connection could be a business or family relationship, monetary payment, or the gift of a free product. Importantly, the Endorsement Guides apply to both marketers and endorsers.

The letters also addressed one point specific to Instagram posts — consumers viewing Instagram posts on mobile devices typically see only the first three lines of a longer post unless they click “more,” which many may not do. The staff’s letters informed recipients that when making endorsements on Instagram, they should disclose any material connection above the “more” button.

The letters also noted that when multiple tags, hashtags, or links are used, readers may just skip over them, especially when they appear at the end of a long post – meaning that a disclosure placed in such a string is not likely to be conspicuous.

Some of the letters addressed particular disclosures that are not sufficiently clear, pointing out that many consumers will not understand a disclosure like “#sp,” “Thanks [Brand],” or “#partner” in an Instagram post to mean that the post is sponsored. When it comes to video, the FTC calls for disclosure to be said out loud or displayed on screen. It can get even more complicated on Snapchat, where there’s not an obvious place to put a hashtag, and the videos are only a few seconds.

Why Its Hot:

Personal endorsements are as old as advertising itself, and there’s always been abuse. So when the FTC highlights influencer marketing as having a disclosure problem, it can come across as unfair.

It’s up to the FTC to be more clear and consistent about their policies and enforcement, because more influencers than not want to adhere, be transparent and maintain their own credibility in their trade. It also should create a statement that is valid across all influencer-leveraged platforms, not just Instagram.

A lot of influencers think they are following the rules, but in fact are falling short. More than 300,000 sponsored posts on Instagram in July used hashtags like #ad, #sponsored and #sp, up from about 120,000 a year earlier, according to Captiv8.

With such a huge increase in the influencer channel in recent years, companies have been pouring marketing dollars into social media endorsements, paying everyone from a Hollywood celebrity to a mom who regularly Instagrams her baby snuggling with a puppy. But marketers need to remember that even the most renown celebrity endorsement is meaningless if it’s not authentic and maybe even harmful if not true to brand and voice.

FTC announcement, as posted yesterday, can be read here.