by Ellen Fruchtman, President
A recent letter to the Federal Trade Commission by Senator Richard Blumenthal may change the way many advertisers do business with their so-called influencers. Evidently, companies that have been promoting “detox tea” as a weight-loss product may be losing some weight of their own in the form of paid influencers. The companies and their influencers (according to Blumenthal) are providing misleading and predatory advertising practices. Which in turn are negatively affecting young adults through these celebrity endorsements. “Unfortunately, many manufacturers of these products are taking advantage of young people’s insecurities and the power of celebrities on social media platforms to endorse their products,” Blumenthal writes.
As we all know, celebrities are receiving up to six figures with these endorsements. And, the FTC is not only taking notice but cracking down on it. What does that mean to a local company? Not much, but it’s important to note this changing landscape. There’s a big difference in a true brand enthusiast, meaning one that really wears or uses your product, to someone being paid. If you do engage a local influencer and you pay them with money or free product (and some retailers and jewelry brands have done this), you will need to disclose it as advertising. The FTC has issued a sharp warning that the influencer or company hiring the influencer must disclose any sort of payment. And, once it’s disclosed as advertising, it certainly won’t carry the same clout or weight. But, then again, you can always purchase some detox tea and be on your way.