How To: Make Money On Instagram Without Being Instagram Famous | trishonnastrends
Many celebrity Instagram sponsorships may be breaking the law
Which brand owns that flamingo?
The INSIDER Summary:
- Celebrities make millions of dollars by sponsoring products through Instagram posts.
- There are legal regulations they need to follow for those posts.
- Only 7% of posts comply with the rules, .
- Both Instagram and celebrities need to do better at making sure people understand they're looking at an advertisement.
- Instagram just announced a new tool to make paid sponsorships more clear.
One way celebrities make money is by selling stuff. It's nothing new. But with Instagram, celebrity sponsorships — also known as "influencer marketing" — have opened up a whole new advertising economy that didn't exist a few years ago. Some celebrities are making millions and millions of dollars from it.
Exact numbers are hard to come by, but reports say that major celebrities like Kylie Jenner can make hundreds of thousands of dollars for one post. Figures differ based on how many followers the celebrity has and the kind of Instagram post, of course. And the nature of the sponsorship deal also matters: a celebrity would be paid differently for a single sponsored post, for example, than for a long-running brand relationship.
But advertisements are regulated by the law, and on Instagram, at least, celebrities don't seem to care. Influencer marketing is an industry estimated to be worth billion.
Marketing firm Mediakix over the course of a month, and found that 93% of their sponsored posts did not comply with guidelines set by the Federal Trade Commission (FTC), a civil law enforcement agency.
What are the rules, anyway?
The FTC guidelines are pretty basic in principle. If there's a "material connection" between an endorser and an advertiser — "in other words, a connection that might affect the weight or credibility that consumers give the endorsement," in the words of the FTC— then the connection should be clearly and conspicuously disclosed.
In other words: if you're sponsoring something, you need to disclose it clearly.
It's a rule well worth keeping. It's important for people to know if they're seeing an advertisement or seeing a genuine post from someone. Not disclosing that difference is dishonest and misleading.
A sponsored post for Magnum ice cream from Cara Delevigne.
What exactly does that mean for Instagram? The FTC offers some specific guidelines for designating sponsored posts:
- The disclosure should be in the first three lines of the post, so followers don't need to tap "more" to see it.
- If multiple hashtags are being posted, the disclosures need to be visible among them. They can't be hidden "in a #forest #of #hashtags #where #no #one #will #notice #ad," .
- Those hashtags need to be clear. "#sp" and "#partner" aren't good enough. "#sponsored" or "#advertisement" would be much better.
Celebrities are getting away without following the rules.
These rules have long been flouted or ignored by celebrities, as the Mediakix report attests. In the past year, though, the FTC has been cracking down. In April, it sent 90 letters to influencers and marketers reminding them about the guidelines, and it's made greater efforts to distribute material that can help them learn what the rules are, like this long, conversational FAQ for influence marketers.
Most celebrities seem to be breaking the rules.
Making things difficult is that it's not always easy to tell what's a sponsored post and what isn't. If DJ Khaled, for example, is a brand ambassador for Air Jordan, does he have to disclose his sponsorship in every Instagram photo where his shoes are visible? Or only the photos where the logo is visible? Or only photos that are specifically designed to be advertisements? It's not always clear.
The FTC's spotty enforcement of the rules hasn't helped. It has fought some legal battles — like settling with Warner Bros. over its sponsorship of a video game with — and has also sent some sternly worded letters, but breaking the rules is still largely consequence-free.
A post from DJ Khaled featuring Nike sneakers. What advertising disclosures do you see?
And even if the FTC does get involved, penalties aren't too harsh. You won't have to pay a fine or go to jail, according to the FTC guidelines. The FTC just says that "law enforcement actions can result in orders requiring the defendants in the case to give up money they received from their violations."
Those fines can theoretically be enormous. An FTC spokesperson told INSIDER that it can collect just under ,000 per violation per day. When you multiply that by the hundreds of millions of people who view, for example, one of DJ Khaled's posts — each view being one violation — you're talking about what can potentially be trillions of dollars.
Of course, the FTC (probably) isn't going to fine anyone trillions of dollars. But the negotiated settlement from such a case could be hefty. There haven't been any massive, large-scale cases against celebrities for breaking influencer rules, though. As far as the public knows, many celebrities are misleading their followers and getting off scot-free.
Misleading posts can have real-life consequences.
Take the example of Kendall Jenner. She — along with Shanina Shaik, Bella Hadid, and other celebrities — promoted the Fyre Festival on Instagram.
In April, the festival turned into a massive disaster, leading to enormous online backlash against the models (and especially Jenner). It raises questions about the relationship between the company and the influencer: How responsible are they for what they're promoting? What responsibilities do they have when the advertising turns out to be false or misleading?
The answers aren't yet clear. But what we do know is that when only a small percentage of celebrities are following the rules for disclosing whether they are being paid to post, something is deeply wrong.
Instagram may be coming up with a solution.
The lawless land of celebrity influencers on Instagram raises a lot of questions — both technological and ethical.
If only 7% of celebrities are following the rules on a regular basis, then we have a problem. But who's at fault? Is it the celebrities? Should Instagram be doing something? Or is the law enforced by the FTC simply outdated?
There are a few technological solutions that could come into play. Instagram has tools for people who want to make formal advertisements on the platform. And influencers and small business owners using Instagram to advertise their companies have been clamoring for more sophisticated tools that better meet their own needs.
Some kind of easy, FTC-approved way of flagging sponsored posts by checking a box would help users follow the rules, and give celebrities no excuse for ignoring them.
They may finally get it. A representative for Instagram told INSIDER that a tool to disclose paid sponsorships is coming soon to Instagram. Users can "tag a partner" while making the post, and the disclosure would be where you'd normally see a location.
Here's an example of what it would look like in normal Instagram posts and with Instagram stories:
Mock-ups for sponsored posts for BuzzFeed Tasty and Volvo. Instagram
A representative for the FTC declined to comment on whether posts using the feature would comply with its regulations, and declined to comment on whether Instagram consulted the FTC to ensure using the feature is a sufficient form of disclosure.
In any case, it's helpful — for both everyday Instagram users looking at posts from celebrities, and for celebrities themselves. The lawlessness of sponsored posts have been a huge problem for some people. Hopefully it comes to an end soon.
Video: Instagram-famous pets get sponsorships
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