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HAVING just received the latest PlayStation console from Sony, Dele Alli, an English footballer, posts a photo of it to his Instagram account. He dutifully thanks his benefactor and concludes the message: “#ad”.
It is the latest frontier of a rapidly growing industry. Since January, more than 200,000 posts per month on Instagram, a picture-sharing app owned by Facebook, have been tagged with “#ad,” “#sp” or “#sponsored”, according to Captiv8, a firm that connects brands to people like Mr Alli. Most are reaching Instagram users via such celebrities. Hiring “influencers”, as they are known, connects brands to a vast network of potential customers. Kim Kardashian West, a reality-TV star, for example, reaches 160m people across Facebook, Instagram and Twitter.
Consumers love the unprecedentedly deep access to the lives of the rich and/or famous that platforms offer. DJ Khaled, a music producer and prolific poster on Snapchat (another picture-messaging app), delighted millions of his followers with live video updates of himself lost at sea at night on a jet ski. He is also an influencer for a brand of vodka. Paul Pogba (pictured), who became the world’s most expensive footballer when he joined Manchester United, often shares videos of himself and friends practising dance routines at home, which all translates into valuable social-media exposure for Adidas, his sponsor.
Advertisers thus build a relationship with potential customers that traditional methods cannot reach. Sponsors value that highly (and whether the celebrity or their social-media manager does the posting seems not to matter).
Yet as media agencies and brands have piled in, the grey area between voluntary celebrity endorsements and paid advertisements has grown murky. Not all influencers label their posts clearly with “#ad”. Consumer watchdogs are crying foul. One, Truth in Advertising, recently accused Ms Kardashian and her sisters of running “deceptive marketing campaigns”.
Regulators have little choice but to respond. This summer America’s Federal Trade Commission (FTC) successfully pursued Warner Brothers, a film studio, for failing adequately to disclose that it paid online influencers to give computer games rave reviews (the firm settled its case). The FTC plans to bring more. Media agencies say defining right and wrong practice would help. The FTC first raised concerns about social-media endorsements in 2009, but the rules are unclear.
The reaction from celebrities has also been swift. High-profile influencers on Instagram and Snapchat quickly began labelling their sponsored content with “#paid” and “#sponsored”. The Kardashians amended their social-media feeds to say “#ad”, or deleted posts. Nevertheless, social media is likely to remain a powerful enabler of the soft sell.
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