Instagram to crack down on UK influencers' 'hidden advertising'
Instagram is to crack down on social media influencers and celebrities in the UK who post without telling followers they have been paid to do so, following an investigation by the Competition and Markets Authority.
The CMA said on Friday it had investigated the issue of “hidden advertising” and was concerned that the Facebook-owned platform Instagram was not doing enough to tackle the problem.
In response Facebook Ireland, which operates Instagram in the UK, said it had committed to a package of measures including prompting users to clearly disclose if a post has been paid for, and putting in place systems to spot posts for which this has not been done. Clear labelling of incentivised posts is required under UK consumer protection law, so that people are not misled.
Last year the CMA secured formal commitments from 16 celebrities, including Alexa Chung and Ellie Goulding, to clearly state if they have been paid or received any gifts or loans of products when making posts on the Facebook-owned platform.
“For too long, major platforms have shied away from taking responsibility for hidden advertising on their site,” said Andrea Coscelli, the chief executive of the CMA. “So this commitment to tackle hidden adverts and overhaul the way people post on Instagram – making it difficult for users to ignore the law – is a welcome step forward. These changes mean there will be no excuse for businesses to overlook how their brands are being advertised either, making life a lot harder for those who are not upfront and honest with their followers.”
Instagram will now make regular reports on its progress in tackling the problem to the CMA, which said the
commitments apply to all Instagram users in the UK as well as anyone globally who directs their posts towards UK users. The CMA said it has not made a finding on whether Instagram’s practices have breached consumer protection law.
“We’re pleased to be working with the CMA on our continued efforts to help people be transparent about when they are paid to post content on Instagram,” said a spokesperson for Facebook. “We are also proud to be launching a programme with Media Smart to help educate young people about branded content and how to identify it.”
Social media influencers can be paid considerable amounts by charging companies to promote products with posts that can be seen by their followers. Such is the money making potential of the site, influencers who have built businesses from their profiles have been dubbed the “Insta-rich”. An A-list celebrity such as Dwayne Johnson, Kylie Jenner or Kim Kardashian can be paid from $850,000 (£660,000) to $1m for a single post, according to research by Hopper, a social media consultancy. Jamie Oliver and Gordon Ramsay, ranked 98th and 99th respectively by the company, could make about $20,000 per endorsed post.
Further proof that Instagram is big business came earlier this week when it emerged that Chiara Ferragni, Italy’s most famous Instagram star with 21 million followers, is considering a stock market flotation in Milan to monetise the clothing-to-lifestyle personal brand she has built over thepast decade. Based on the revenues the three businesses the 33-year-old controls, her group could be valued at €80m (£73m).
Instagram, the world’s second largest social network – with an estimated 850 million regular users – is hugely popular among younger demographics whom advertisers are desperate to target, as they shift away from traditional media. Instagram’s revenues are expected to rise 47% this year to $13.9bn, and to $18.2bn in 2021, according to the research firm eMarketer.
Hopper’s Instagram Rich List for 2020 ranks Dwayne Johnson as able to command the most money per post, at $1m, followed by Kylie Jenner ($986,000), the football player Cristiano Ronaldo ($889,000), Kim Kardashian ($858,000) and with the US singer Ariana Grande ($853,000) rounding out the top five. The top 10 is rounded out by Selena Gomez ($848,000), Beyoncé ($770,000), Justin Bieber ($747,000), Taylor Swift ($722,000) and the Brazilian football star Neymar ($704,000).