Another Buzzword: "Influencer Marketing." Does It Pass FTC's "Authenticity" Smell Test? | Pharma Industry Regulation | Scoop.it

With it’s massive growth, proliferation on difficult-to-control social media platforms, and the oftentimes contradictory language from influencer marketers themselves, influencer marketing has become something of a wild west—something that, if influencers and marketers aren’t careful, could end up hurting the longterm prospects of the industry as a whole.

 

The practice is another form of native advertising, except it relies on social media influencers rather than in-house advertorial. Native advertising on publisher sites has come under fire for sometimes deceiving and confusing readers. Our 2015 study, showed that 48 percent of respondents felt deceived by native advertising.

 

So far, influencer marketing has escaped much of the same criticism.

 

In December, the FTC finally released an updated version of guidelines for native advertising, asking publishers to include a variation of “Ad,” “Advertisement,” “Paid Advertisement,” or “Sponsored Advertising Content” in the beginning of an article or video. Most framed the guidelines as an attempt to reign in native advertising on digital publications. (The FTC’s use of “native advertising” as an umbrella term for any sort of promotional material that’s not a traditional ad probably didn’t help.)

 

In a Digiday article, Todd Krizelman, co-founder and CEO of MediaRadar, an ad data firm, estimated that only 30 percent of publishers were in compliance with the rules and that 26 percent do not disclose at all.

 

But few considered the ramifications of the new guidelines on influencer marketing, which is subject to the same rules.

 

“They are looking for very explicit call-outs,” Krizelman said. “They want to see the words ‘This is an ad’ or ‘Paid advertisement.’ They do not want to see things like, ‘Presented by.’ Today, if Kim Kardashian is posting [an ad], she may just post it. No one would know if she was paid or not paid.”

 

“The FTC and other regulatory authorities are very concerned about influencer and native advertising,” said Andrew Lustigman, an attorney at Olshan Frome Wolosky who specializes in advertising and marketing. “Because the message is now coming from a third party, regulators want to make sure that consumers know that there is business relationship between the parties so that they can evaluate the message with that in mind.”

 

Unfortunately, this is anything but standard practice.

 

When you browse influencer marketing best practices, “trust” and “authenticity,” are two words that constantly appear. A February 2016 study by eMarketer suggested that influencer marketing has become more popular, in part, because of young people’s trust in social media stars, who they tend to see as more authentic than a brand or an advertisement.

 

“The key word that I’m coming back to in everything I talk about with influencers is authenticity,” said Todd Cameron, head of content and strategy at influencer marketing software company TapInfluence.

 

Trustworthy influencer marketing is only possible when social influencers disclose, boldly and proudly, that what they’re doing is a paid advertisement. If the brand or the influencer try to hide this fact, they risk undermining consumer trust for both parties.

 

Even if influencers and marketers continue to deceive consumers, there’s little doubt that more regulation—and better clarified regulation—from the FTC is coming.