Instagram will warn influencers when they don't disclose sponsors

Brief:

Instagram, the Facebook-owned photo sharing app with more than 2 million advertisers worldwide, is letting more content creators use its branded content tag to disclose sponsorship relationships in posts, Mashable reported. The branded content tool lets more Instagrammers like social influencers or celebrities add a “Paid Partnership with” tag to a photo description, per a blog post.
Instagram started testing the branded content tool in June with a handful of users. To get permission to use the tool, users must have a certain level of engagement with their posts and stories, an Instagram spokesperson told Mashable.
Instagram also is changing how it tells users when its system detects that they're violating disclosure policies. Creators will receive an in-app notification if their content is flagged as branded but not disclosed. Instagram will then remind them to use the branded content tool to tag sponsors.

Insight:

As a popular platform for influencer marketing, Instagram has an opportunity to set standards in this quickly growing but still not fully formed area. Ideally, influencer marketing needs to make it clear to users what content is paid for by a marketer while not detracting from the viewing experience.

Instagram’s criteria for giving content creators access to its branded content tool aren’t completely clear despite the company’s efforts to formalize a system of disclosing sponsorship relationships on its platform. Engagement level is only one factor that the company considers in deciding who’s allowed to tag posts with “Paid Partnership” notices. Instagram also handpicks creators based on how much branded content they’ve shared, Mashable reported.

The branded content tool also provides insights to businesses with access to analytics to help evaluate their marketing spend on branded content, Instagram said. “With the branded content tag, I'm able to be fully transparent about my commercial relationships on Instagram and that transparency extends to the businesses that I partner with in the form of analytics,” model Xenia Tchoumi said in Instagram’s blog. She has 1.2 million followers on the platform.

The news comes as the Federal Trade Commission is intensifying its focus on social media influencers and how they disclose their paid relationships. The agency in September reached its first settlement with influencers Trevor “TmarTn” Martin and Thomas “Syndicate” Cassell after charging them for deceptively endorsing an online gambling service while failing to disclose they jointly owned the company. The FTC also sent warning letters to 21 social media influencers about their Instagram posts and updated its guidance on recommended disclosures. Marketers need to be mindful of those guidelines to avoid more run-ins with the federal officials.

More broadly, digital platforms are making greater efforts to make content such as user posts, news reports and advertising more transparent following a year of negative publicity and increased scrutiny of their business practices. Google, Facebook and Twitter last week were grilled on Capitol Hill as part of several investigations into how social media companies let Russia meddle in last year’s U.S. presidential election. Democrats and some Republicans on a Senate Judiciary subcommittee pushed for harsher remedies for political propaganda, including regulations on their advertising practices similar to rules for political ads on TV, the New York Times reported.