Today, advertisers are looking for new ways to reach consumers, in part because traditional TV viewership is declining, with approximately 2 million viewers per year “cutting the cord” and moving to online viewing. That leaves about 27 million U.S. households without a television today, 5 million more than in 2014, according to research firm Convergence Consulting Group.
“We live in the age of the cord cutter, viewers who want to watch what they want, when they want, from any device they want.” says Lauri Harrison, a marketing professor at Columbia University in New York.Â
Given the success of Facebook and Twitter, it’s no surprise that advertisers are turning to social media. Brands such as Beats, Red Bull, and Airbnb are willing to pay tens of thousands of dollars per post to celebrities like Gomez, Kim Kardashian West, and Justin Bieber. And these so-called influencers often frame endorsements as innocent mentions, making the ads harder to spot. Â
“Their followers may not realize they’re looking at an ad and it’s not just that Kim Kardashian West really likes a particular type of jeans,” says Patten.
The watchdog group investigated the social media practices of Kardashian West—who has 94 million Instagram followers—and her family members last year.Â
By comparing Kardashian West’s Instagram posts with posts by companies suspected of paying her to feature their products, TINA found that they were almost identical. The similarity prompted a letter to her attorney. Â
After the complaint, some posts were taken down, or the hashtag “#ad” was added. But the majority went unchanged, and last August TINA filed a complaint with the Federal Trade Commission (FTC), the federal agency that protects consumers from unfair or deceptive business practices.
But because product placement on social media is so new, the FTC is struggling to figure out how to define ads in that medium and the rules that govern them, says Michael Ostheimer, an FTC attorney. One big challenge is that celebrities post on social media all the time, usually for self-promotion and often to endorse products; it’s not always simple or easy to tell the difference (see “How to Spot an Ad,” below).
Patten, of TINA, says the responsibility for honest advertising lies not only with celebrity endorsers but also with the companies that pay them. But ultimately, she adds, it’s up to consumers to be aware of what they’re seeing.Â
“Unfortunately, many of these companies and influencers aren’t following the rules,” Patten says. “So it’s up to us to be skeptical and aware that anything we’re looking at could be an ad.”