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Call to bring undisclosed social media endorsements under scanner

02-December-2016
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Call to bring undisclosed social media endorsements under scanner

Consumer advocacy groups in the US are seeking higher accountability and honesty from micoinfluencers, bloggers and celebrity influencers using social media applications like Instagram and Facebook to review and endorse products and services. In a letter sent to the Federal Trade Commission (FTC) on November 30, four advocacy groups have urged the Commission to enforce its policy which states that paid endorsements should be identified with #advertisement or #ad.

Microinfluencers are increasingly gaining traction among their social media followers, becoming legitimate promoters of brands, products and services. This calls for accountability of these social media influencers. “Undisclosed paid endorsements from average consumers represents a dangerous trend that the FTC must address, since people generally place more trust in recommendations made by their peers and have no reason to believe that their friends, colleagues and family are engaging in paid product promotion. Thus, companies are preying off of the trust and relatability of smaller level influencers,” the letter stated.

Public Citizen, Commercial alert, Campaign for a Commercial-Free Childhood, and Center for Digital Democracy were the four groups to send the letter to the FTC. This is not the first time the groups are brining to the notice of the FTC the issue of undisclosed endorsements. A letter was sent to the FTC earlier this year in September when the group brought to the notice of the FTC 100 instances of undisclosed endorsements on Instagram, the letter said.

The FTC in its guidelines on social media endorsements states the problem with undisclosed endorsements thus – “The issue is – and always has been – whether the audience understands the reviewer’s relationship to the company whose products are being recommended. If the audience understands the relationship, a disclosure isn’t needed. Disclosure of that relationship helps readers decide how much weight to give the review.”

Social media influencers and bloggers in India must consider this a fair warning. Given that the Indian social media space is still developing, it remains to be seen how the Indian social media planning industry will address this fairly significant concern that questions the honesty of social media influencers. 

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Prior to joining Madison PR in 2012 Chaudhary was Group President Corporate Communications at Reliance Industries Limited.