Do you follow celebrities, influential people or favorite blogs on social media hoping for a beauty tip, investment advice or other information that may lead you to purchase a specific product, change your lifestyle or perhaps make a significant life-changing decision?
Social media influencers populate many areas of consumer interest: hobbies; travel; financial advice; beauty products; designer clothing; diet, exercise and healthy lifestyles; and a variety of other topics. Did you know that social media influencers engage in a form of marketing intended to target potential buyers?
Influencer content may be framed as testimonial advertising where influencers portray the role of a potential buyer themselves or they may be third parties. These third parties can be either in the supply chain, such as retailers, manufacturers, etc., or may be so-called value-added influencers, such as journalists, academics, industry analysts, professional advisers, and so on.
Social media influencers aim to increase brand awareness and engagement with consumers, but first, you need to identify who these people are.
As long as social media influencers fully disclose that they are compensated for their endorsement or testimonial, there is nothing wrong with the practice. You will often see a disclosure in TV ads when celebrities are endorsing a product, such as life insurance or legal services. In this regard, you are fully aware that the celebrities are compensated and can determine the value of their opinion for yourself.
But what if a social media influencer isn’t playing by the rules?
Following a public comment period, the Federal Trade Commission has approved a final consent order settling its first-ever case against individual social media influencers, the owners of the CSGO Lotto website.
The Commission’s September 7, 2017 complaint charged Trevor “TmarTn” Martin and Thomas “Syndicate” Cassell, two online influencers who are widely followed in the gaming community, with deceptively endorsing the online gambling service CSGO Lotto, while failing to disclose they jointly owned the company. According to the FTC, the defendants also paid other well-known influencers thousands of dollars to promote the site on YouTube, Twitch, Twitter and Facebook, without requiring them to disclose the payments in their social media posts.
The Commission order settling the charges prohibits Martin, Cassell, and CSGOLotto, Inc. from misrepresenting that any endorser is an independent user or ordinary consumer of a product or service. The order also requires clear and conspicuous disclosures of any unexpected material connections with endorsers.
So the next time you are tempted to purchase a product or service endorsed in social media, stop and think — have they been compensated, perhaps they own the product, and make your decision wisely.
The Federal Trade Commission works to promote competition and to protect and educate consumers. You can learn more about consumer topics and file a consumer complaint online or by calling 1-877-FTC-HELP (382-4357). You can follow the FTC on Facebook or Twitter, and read its blogs for the latest FTC news and resources.