Is the Government Killing Influencer Marketing?

In the new frontier of influencer marketing, it has become difficult to determine if a celebrity is genuinely promoting a product because they love it or they’re being paid to do so. Most influencers will say that it is usually both, but the FTC wants to increase the transparency from brands so that consumers can easily tell the difference.

From Fortune 500 companies to startups, influencers have been brought in as endorsers to help push products towards their desired audiences. Influencers don’t even have to be famous. Many of them simply hold access to an audience that certain brands desire.

Influencer marketing hasn’t gone unnoticed by The Federal Trade Commission, the agency that enforces U.S. truth-in-advertising laws. The FTC is determined to shine light on the relationship between the celebrities and the products they’re endorsing. They’re insisting that endorsers need to be clear when they’re being paid to promote a product and using hashtags like #ad, #sp, #sponsored are not enough.

The agency says it is the duty of the advertisers to make sure they comply to FTC rules as no more warnings will be given to ads that aren’t disclosed. According to Michael Ostheimer, a deputy in the FTC’s Ad Practices Division, “We’ve been interested in deceptive endorsements for decades and this is a new way in which they are appearing,” he said. “We believe consumers put stock in endorsements and we want to make sure they are not being deceived.”

When it comes to video, the government agency is asking for disclosure to be said out loud or displayed on screen. Just imagine how this will ruin endorsements via Snapchat or Vine where there is not adequate room to add the appropriate endorsement credits.

The FTC has already accused Lord & Taylor and Machinima Inc. of failing to properly disclose paid native ads for their products and their jurisdiction is only expected to get tighter.

Social media has become a place where brands spend heavily – especially on influencer endorsements. According to Captiv8, brands are spending more than $255 million on influencer marketing every month on Instagram.

Does This Mean the Future of Native Advertising is Branded Content?

Branded content is a form of marketing that is even more inconspicuous than influencer marketing when done right. It may seem backwards, being that branded content veers away from talking about the product while influencers are used to associate a face with a brand’s product.

Although branded content is a major force in the world of content marketing, it’s still just advertising. It is a way for brands to engage with customers through brand storytelling, education, or brand-driven experiences.

For example, Gatorade took its first step into virtual reality (VR) with a branded content campaign in 2015. The VR experience let users take the place of Washington Nationals’  outfielder Bryce Harper in the batter’s box at their home field. The campaign used a combination of live action, VR, and binaural audio that created a first-person, 360-degree experience of an MLB player at bat. This was perfect for targeting their desired customer; the competitive athlete.

With the FTC making brands and social media stars more transparent about sponsored content, influencer marketings impact will dwindle. With the need for organic, natural promotion, branded content may evolve to become the future of native advertising.