Instagram Paid Partnerships To Add More Transparency

Instagram recently announced the trial launch of a new scheme to more explicitly denote a “paid partnership” among influencers using the social media app. Influencers refer to the many celebrities and self-made users who promote brands, products and services through their social media platforms for the generation of revenue. 

Whether it is a celebrity being paid to post about new products that entered the market or social media users being sponsored by well-known brands, influencers have taken over the Instagram sphere and these social media paid ads are becoming more and more ambiguous to everyday users.

Influencers have found loopholes in the regulations by tagging #sp instead of #sponsoredpost, or “Thanks (brand name)” without fully disclosing the nature of the relationship between them and the brand mentioned.

Due to the alarming rate of influencers taking advantage of previously lax guidelines regarding sponsorships and promotions (where only 7% of the top 50 influencers abide by these rules according to studies), the Federal Trade Commission issued warnings, which have prompted Instagram to come up with this new Paid Partnerships scheme.

According to Charles Porch, head of global creative programmes at Instagram, this plan is “done internally on (their) own” and not a collaboration with the Federal Trade Commission.

Despite the 88% of companies in 2016 allegedly reporting that they ensured their influencers do disclose sponsorships, the Federal Trade Commission is not satisfied at the statistic.

Instagram’s small-scale launch is only relevant to a limited number of influencers who have been selected to test out the new Paid Partnerships feature, and Instagram’s aim is to receive as much feedback as possible from those involved.

In order to eliminate any potential misunderstandings and maintain complete transparency, Instagram now offers brands the chance to tag the company they are working with and include “paid-partnership” as a sub-header above their post. This will allow users to identify which posts are authentic and which posts are paid partnerships.

Instagram’s goal is to ensure “transparency within the community” according to Porch, while “serving the creators, the brands and also the community.” Hopefully, this plan will aid in attaining that for the 700 million active users per month.

How does this affect Influencer Marketing in Australia?

If you’re an Australian brand looking to engage an influencer, it’s important to understand the governing regulations.

The Australian Association of National Advertisers states that:

“advertising or marketing communication must be clearly distinguishable as such to the relevant audience”.

This is the first time Australian advertisers face the demand to make ads “clearly distinguishable” from surrounding content and make sure they “do not camouflage the fact that it is advertising”.

This new code of conduct from the AANA covers all social media platforms, not just Instagram, and any kind of social media user whether you are simply a hobbyist or a professional blogger.

The Australian Competition and Consumer Commission (ACCC) now has the power to prosecute for a breach of the Australian Consumer Law and a failure to disclose sponsored or paid ads carries a maximum fine of $220 per post for an influencer or blogger, and 1.1 million for a brand.

As a constantly evolving communications platform, the game will continue to change and it’s becoming even more important to understand the rules.

If you’re looking to implement influencer marketing as a part of a greater social media marketing campaign, feel free to contact one of our experienced team members for a chat.