Instagram Rolls Out An Important Influencer Marketing Tool That Labels Sponsored Posts

Social media has been heavily utilized by brands to generate more exposure for their products. Through influencer marketing, brands partner with celebrities or social media influencers with a huge following to make sponsored posts to boost sales. More often than not these posts are unlabeled and without any indication that they have been paid for by an advertiser. However, all that will change with Instagram’s newest feature.

Instagram is launching a new standardized tag for sponsored posts to allow endorsers to inform their followers that they have partnered with a brand in particular posts. The tags will appear where the location tags are placed, which is just below the person’s Instagram username. In return, users who made use of this tool will receive statistics or Insights that tracks down how many people saw or engaged with their posts.

Users will start seeing a “Paid partnership with” tags on Instagram posts and stories to indicate that it is a sponsored post.

With the new sponsored post tag, Instagram aims to make the “first step in ensuring transparency of paid partnerships” on the platform. Instagram will start with a small-scale launch of the new tool, making it available a selected number of influencers and brands first. Depending on the feedback, Instagram may make the tool available to over 700 million users.

The move addresses the lack of transparency and accountability that plague product endorsements by personalities on social media. Such sponsored posts without proper ad labels violate the Federal Trade Commission guidelines.

The FTC guidelines provide that any “material connection” between an endorser and an advertiser should be clearly and conspicuously disclosed. FTC defines “material connection” as that which might “affect the weight or credibility that consumers give the endorsement.”

In April, FTC sent more than 90 letters to social media influencers and brands on Instagram requiring them to “clearly and conspicuously disclose their relationships to brands when promoting or endorsing products through social media,” CNN reported.

A study conducted by marketing agency Mediakix showed that about 93 percent of sponsored posts weren’t properly labeled to indicate the creator’s relationship with the company or product it is promoting. The study reviewed 50 of the “most-followed” personalities on Instagram over the course of a month.

The Kardashian-Jenner clan is famously known for plugging brands on Instagram. Through sharing images of them holding or posing with a product, they advertise brands to their millions of followers. However, the sisters have been accused of not following the FTC guidelines properly.

Kylie Jenner at the Sugar Factory American Brasserie at the Fashion Show in Las Vegas

According to Mashable, an advocacy group called Truth in Advertising sent a letter to Kris Jenner and brands the family is associated with alleging that there were instances when Kourtney Kardashian, Kim Kardashian, Khloe Kardashian, Kylie Jenner and Kendall Jenner failed to disclose that their posts sponsored by a company. The companies targeted included Puma, Fit Tea, and Calvin Klein.

In August 2016, FTC moved to toughen its crackdown on unmarked advertisements by tightening its rules. Hashtags such as #ad, #sp and #sponsored will not be considered sufficient compliance to the rules. Instead, users are now required to clearly state that they are partnering with a brand or when a post is paid for by a brand.

The FTC is also imposing upon advertisers the responsibility to make sure that celebrities and influencers comply with its rules. As per FTC, any form of compensation, whether monetary or in kind such as free products, should be disclosed at all times.

Kendall Jenner at the launch of the #mycalvins Denim Series.

“We’ve been interested in deceptive endorsements for decades and this is a new way in which they are appearing,” FTC Ad Practices Division deputy Michael Ostheimer told Bloomberg. “We believe consumers put stock in endorsements and we want to make sure they are not being deceived.”

Influencer marketing is an industry estimated to be worth $1 billion. Social media users can earn hundreds of thousands for a single post, depending on the number of followers a person has and the kind of Instagram post made.

[Featured Image by Justin Sullivan/Getty Images]