- While 71.5% of Instagram influencers attempted to disclose their relationships with sponsors, only 25% did so in a way that complies with guidelines from the U.S. Federal Trade Commission, according to a study by Inkifi shared with Mobile Marketer.
- Health and fitness influencers were the worst at posting sponsorship notices, with only 60% attempting to disclose and just 16% abiding by FTC guidelines. Fashion and beauty influencers were found to be the best at disclosing with 77% attempting to do so and 33% following FTC rules.
- Inkifi analyzed the accounts of 800 social influencers' Instagram accounts from the U.S., U.K. and Canada. All the analyzed accounts had audiences in at least two of the three countries, meaning the account holder must abide by both countries' laws. By not complying with the guidelines, influencers and the brands they work with could face account shutdowns or potential legal action.
Social influencers who don't provide adequate disclosure about paid relationships with sponsors make themselves and the sponsors vulnerable to potential FTC fines and class actions from consumers who can claim they were deceived by disingenuous or even fraudulent claims about a product or service. The FTC last year warned the social influencer industry that it would get more aggressive about taking action after settling its first-ever complaint against two social media influencers for not disclosing connections to a business they touted to online followers. The agency also posted specific guidelines for influencers to follow and protect themselves.
The influencer market is growing at a rapid rate, and more influencers are tagging posts with the #ad hashtag to indicate a paid sponsorship. Instagram saw the number of posts showing the #ad hashtag jump by 198% to 1.5 million in 2017 from the prior year. Last year, #ad-tagged posts grew to 171,000 by December from 85,000 in January as influencers adopted the FTC guidelines relatively quickly, influencer marketing platform Klear found.
Instagram is among the social media platforms that are seeing growth in bot accounts created by the booming industry of selling fake followers and fraudulent engagement, per The New York Times. About 16.4% of the followers on Instagram's top 20 accounts were fraudulent, the Times reported based on research from Dovetale, a software company that ferrets out fake social media accounts and packages the data for marketers. The profusion of fake followers means that brands need to be mindful of suspicious activity on an influencer's account, such as a spike in engagement in a short period.