Ads on Instagram are already here. But are they legal?

Place your bets now please…

The facts:

  • The Facebook-owned photo-sharing site, Instagram, does not have a business model (yet).
  • ‘Official’ ads will be coming soon (if on hold), but celebrities (and their sponsors) aren’t waiting around.
  • The US Federal Trade Commission state that ads on social media must be labelled as such*.

With those key points in tow, let’s take a look at a few recent examples of how ads have begun to appear on the this particular social network –

EXAMPLE 1:  Lebron James, Nike

Copy: ‘These are simply the best!! Ultra comfy and can wear them with anything. I’m ordering 100 pair right now. #kicks #Nike #family’

Is this an ad? It could be deemed as such, certainly. Is Lebron James sponsored by Nike? Definitely. Is ‘endorsement of product across social media’ part of his contract? Maybe. This is something I’ve talked about before. In short: how do social media advertising rules work when it comes to sponsorship deals? Should this image have an #ad tag?

Let me know in the comments.

EXAMPLE 2. Kim Kardashian, Sun Kissed

Copy: ‘Sprayed tonight after watching KKTM! My legs are soooo dark! Loving Kardashian SunKissed! #AvailableAtUlta’

If this isn’t an ad, then I really don’t know what is. Let’s review –

  1. We’ve got a CLEAR product shot!
  2. We’ve got a a massive ENDORSEMENT (Kim’s ‘LOVING’ it guys).
  3. Finally, that final hashtag? Oh, hi there call to action. How you doin’?

All of these elements add up to a clear piece of advertising. Is it marked up as such? No. While you could argue that KK is endorsing her own products here (so no money has officially changed hands, and this is technically not actually ‘paid for’ advertising) and therefore she’s exempt from the advertising guidelines… but still, it’s a grey area at best.

EXAMPLE 3: Nicole Richie, Suave
(image via Ad Age)

Copy: ‘Ad: My new don’t-leave-home-without-it product? Moroccan Infusion Styling Oil from @SuaveBeauty! Check out ways to add brilliant shine to your style here: bit.ly/XDJOkp’

OK, so this works. Finally someone is using the ‘Ad’ tag properly when it comes to advertising via earned media – hurrah! The interesting point here is that the brand in question has gone on record and said that the above image was indeed part of the existing partnership between the company and Ms Richie. Again, making things even clearer. Perfect.

——  So what can we learn from this?

There are three things at play here –

1. Without a business model, Instagram, and therefore Facebook, is clearly missing out on potentially lucrative ad dollars being bought and sold on their network.

2. Celebrities, and their sponsors, are getting smarter, faster.

3. In the same way that the ASA took Snickers and Nike to tribunal here in the UK, I wouldn’t be surprised if the FTC went knocking on the doors of a few US-based brands in the very near future.

It sounds so obvious when you say it out loud but, when it comes to paid-for endorsements on social media, clarity and transparency are key.

 

*Here in the UK, the ASA have a similar policy but the terms regarding disclosures are not as explicit.

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3 thoughts on “Ads on Instagram are already here. But are they legal?”

  1. What strikes me as interesting is the stats from these. The Nicole Ritche (who?) ad got fewer than 1,000 clicks. See https://bitly.com/XDJOkp+

    Now, you can argue that engagement and awareness is more important than tawdry click-throughs, or that self-identifying as an advert reduces interations. But I wonder whether paid celebrity endorsments have much currency in a social media world which seems to favour authenticity.

    T

    [Reply]

    James Whatley Reply:

    Good sniffing. Let’s look closer.

    For a link that *isn’t clickable* 959 clicks against 757k Instagram followers (CTR of 0.12%) isn’t that bad. Yes, there’s something to be said about the use of a URL-based CTA in a non-URL clickable environment, but still. Also, 25.8k likes (3.31%) against something that is *clearly an ad* isn’t bad either.

    You raise a valid point about authenticity too. But for the audience to make that call, they first need to know what they’re looking at is an ad, which a many of the examples shown do not.

    [Reply]

  2. Looking at that bit.ly, it’s hard to unpick where the traffic came from. Assuming that all “direct” clicks are copy-pastes from Instagram, then the total is closer to 368.

    I have never, BTW, seen Instagram appear as a source in any Analytics reports. New clickable ads may change that. Doubt it.

    [Reply]

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