Quick Links

Social Media Transparency: How To Advertise On Social Media

Oct 4, 2022 | Blog

With the recent news that Kim Kardashian has settled charges laid by the U.S. Securities And Exchange Commission for $1.26million, for the breach of the anti-touting provision of federal securities laws, the issue of influencer brand partnerships and marketing has been brought to the forefront. The case of Kim Kardashian comes as a result of her advertising EthereumMax cryptocurrency tokens on her Instagram Account in 2021, without properly disclosing that she was paid $250,000 by Ethereum to promote their token.

 

So, what is the problem with social media endorsements? Why must influencers disclose when they are advertising a product? And how can influencers and brands ensure that their sponsored content is fairly disclosed?

 

What Is Disclosure, And Why Is It Important?

 

    Disclosure, in the context of social media advertising, is the act of highlighting when content has been sponsored by a brand with the aim of influencing a profile’s followers to buy or otherwise engage with the subject of the promoted content. Influencers must make it clear that they have received some sort of incentive for promoting a certain product or service on their platform. 

 

So, why must they highlight their sponsored content? It’s obvious from their name, but Influencers can have a lot of power over their followers to incentivise them to perform a certain action. Influencer marketing is successful because of the power and weight popular social media users have over regular consumers. An endorsement from an influencer can motivate people to buy a service or product, as they trust influencers and their word as to what is a good product or not. Not disclosing sponsored content is considered misleading business practice.

 

As the case with Kim Kardashian highlights, many countries, including the United Kingdom, have regulations as to how to create sponsored content for social media profiles. Violation of these consumer protection guidelines can lead to enforcement action being taken by regulatory bodies, such as the U.S Securities And Exchange Commission in the US, or the Competition And Marketing Authority and Trading Standards in the United Kingdom.

 

Sponsored Content Do’s & Don’ts

 

According to Gov.uk, here are some do’s and don’ts for creating sponsored content on social media platforms:

 

Do’s

 

  • – Disclose when you’ve been paid to promote a product or service, or if you have been loaned or given a product or service for free.
  • – Clearly state your relationship with a brand or business.
  • – Ensure your statement of disclosure is easy to understand and is unambiguous
  • – Make sure your disclosure statement is easily viewable without the need for consumers to click for more information, regardless of device used to view the post.

 

Don’ts

 

  • – Mislead your audience about your relationship with a brand or business.

   – Make your disclosure ambiguous or easy to miss. This includes:

  •               – Using hashtags such as #ad and #spons as your only form of disclosure.
  •               – Placing your disclosure at the end of your post’s description, making it harder to see.
  •               – Tagging a brand in the post description as the only method of disclosure.
  •               – Using ambiguous language in a post without additional exposure, e.g. “thank you”, “in collaboration with”, etc.

 

In Summary

 

    Due to the power social media influencers can have over their audiences, the disclosure of brand-influencer relationships must occur properly so as to not violate misleading business practice laws and regulations. When this is not done correctly, as is the case with Kim Kardashian’s partnership with Ethereum in 2021, this can lead to legal action being pursued by consumer safety regulatory bodies. There are a few ways to help ensure your sponsored content is fairly disclosed to your audience.

Font Resize