The Federal Trade Commission (FTC) recently announced it was cracking down on improperly-labeled native advertising and disclosures on paid social media posts.
93% of sponsored celebrity posts aren’t FTC complaint
Paul Dughi

Celebrity endorsements: Your ticket to riches? Maybe, maybe not.

I introduced Celebrity endorsements into the wood-burning stove industry back in the early 1980s. Up until that point marketing these boxes of steel was mostly efficiency, the heat factor, or furniture quality. The market was boring. I took John Riggins, then famous Washington RedSkins football player, and teamed his with a drop-dead beautiful model, put them both in formalwear — he in a tux and her in a drop-dead gorgeous black gown — with the product and BINGO! Success. The ads, handouts and (the model) appearances at consumer trade shows captivated the audience and maybe 30% increase in orders. Shortly thereafter celebrities began appearing in most other stove manufacturers advertising. Today, you can make literally billions on the right endorsement at the right time. It’s almost criminal…. well, actually it is criminal!

Celebrity endorsements, on average, increase sales of a product by 4 percent, found a Journal of Advertising Research study. For a reported $200,000, you can have Kim Kardashian* recommend your product on Instagram. Or, for only $3,000, Lisa Rinna* of “The Real Housewives”* will highlight your product in an Instagram post.

You’ll pay roughly $1,000 for an Instagram post from an influencer who has between 50,000 to 500,000 followers, according to Captiv8, a company that connects brands to influencers. But when others see that branded Instagram post in their feed, they may not know or realize that it’s essentially a paid ad. It’s easy to misinterpret these as heartfelt endorsements, and no matter how you slice it, that’s misleading.

And as it turns out, that breaks the law.

Read this informative article by Emma Fitzpatrick in MultiBrief