There are those who think when the government regulates business, it stifles productivity. Others think regulations protect us all from unscrupulous companies that would sell horse meat labeled as prime rib. The internet—home to Lonelygirl15, Craigslist, internet dating, and fake news—has never lent itself to regulation. The Federal Trade Commission (FTC), however, has recently taken notice of this lawless landscape and is trying to bring at least a semblance of accountability to one area of the internet.
The website of the FTC says, “The FTC protects consumers by stopping unfair, deceptive or fraudulent practices in the marketplace.” The unfair, deceptive, or fraudulent practice the FTC is currently taking aim at is the use of social media influencers.
Influencers blog or provide content within a certain niche. They have a large, trusted audience on social media, and are paid by companies to promote products to new and existing audiences on social platforms and messenger apps. Their popularity is increasing, because for every $1 an advertiser spends on an influencer, there is a $7.65 return. Of companies surveyed, 67 percent are increasing their budgets for influencer marketing.
Forbes reports that 92 percent of consumers trust an influencer more than an advertisement or celebrity endorsement, and 94 percent trust them more than friends or family members. Those statistics are amazing, and they’re also why the FTC is suddenly interested.
You trust your doctor because you consider him an expert in his field. If your doctor prescribes drug XYZ, you follow his advice. Would you be as trusting and anxious to get the prescription if you knew your doctor was being paid to promote drug XYZ?
In April 2017, the FTC updated its Endorsement Guide to include online influencers, sent warning letters to those they felt were engaged in deceptive practices, and began taking legal action against influencers in September. At the same time, 2017 saw a rise in demand for influencers and in what companies are paying them.
Will these new regulations precipitate the end of influencers? That’s doubtful. According to Google, interest in influencer marketing has increased nearly 9,000 percent since 2013. The website, eMarketer, found 84 percent of marketing professionals expected to launch campaigns using influencers in the next 12 months. With ad-blockers on 615 million devices, including 70 percent of the much-sought-after millennial market, companies are wasting money on traditional ads. Influencers may be the most effective means of reaching a target audience.
The future of influencers looks bright. The Next Web asked a dozen young entrepreneurs how they thought influencer marketing would change following the FTC guidelines. The consensus is that
- Influencers with large followings will survive
- Full disclosure will force brands to do a better job of selling value
- Brands will be more careful about who they hire as influencers
- Influence marketing will see a rise in quality and a drop in scammers
- Regulations will be a good thing for consumers, companies, and influencers
If you would like to find quality influencers to promote your business, McFadden/Gavender can help. Our social media experts will find trusted influencers with huge followings in your target market. If your current ads and promotions aren’t working and you’d like a more profitable result, give McFadden/Gavender a call. We’ll take your brand further.