The Federal Trade Commission filed its first-ever case against social media "influencers" last week. The FTC says that two popular gamers posted messages endorsing an online gaming service without disclosing that the two gamers owned the company. It also sent 21 warning letters to prominent social media influencers that it had previously warned about their potential violation of FTC standards.
Why it matters: The ambiguity around "influencers" hawking products on social media sites has created an advertising frenzy on social media, with no clear distinction between who is sponsoring what. FTC Acting Chairman Maureen Ohlhausen says the Commission's first-ever action against individual influencers, "should send a message that such connections must be clearly disclosed so consumers can make informed purchasing decisions."
- Our thought bubble: Like the FTC's native advertising guidelines, these will be tough to enforce. A MediaRadar study earlier this year found that nearly 40% of media organizations don't comply with the FTC's standards for labeling and disclosing native ads.
- Worth noting: Influencers have a unique relationship with consumers that brands would kill to leverage. This is why some media companies are letting their own talent hawk products as influencers on their personal social media accounts. With this in mind, some of the biggest tech companies are trying to get a part of the action.
- Google & Microsoft are building software to identify influencers, according to CB Insights. "New patents aim to identify and encourage online experts and influencers — with implications for brands and content creators."