United States: Digital Influencers Pose Difficult Questions For Flesh-And-Blood Regulators

In a world where virtual celebrities make endorsements, how is advertising governed?

F for Fake

Is an Instagram post an ad? That's the question posed by Truth In Advertising Inc. in its "Ad or Not?" series. The blog explores the application of Federal Trade Commission rules to real-life celebrity and influencer endorsements. It presents a recent Instagram or blog post and asks, "Is this merely innocent fun, or, in reality, an undisclosed ad?" Many times, it is difficult to determine whether an influencer's post is a consumer or celebrity's objective thoughts on a brand or product or a promotion that the advertiser has secured through payment or other consideration.

Therefore, the FTC updated guidelines requiring social media endorsers that receive anything of value from the brand, even samples and sweepstakes entries, to disclose their relationship to brands they talk about. The FTC staff has provided FAQs explaining how to comply with the guidelines, and we have explained how to apply these guidelines in a blog post here.

Metropolis

For obvious reasons, celebrity influencers toy with the knife's-edge border between their spontaneous, "real life" preferences and product advocacy. The Commission's rules exist to help consumers understand which side of the border they're on when they interact with the influencer.

But even "candid" pictures of Instagram models are carefully constructed artificialities; every choice – from wardrobe to makeup to the technical qualities of the photo itself – is deliberate. Artificiality is the point. Humans are great at faking it.

Mirrored Hall

Which brings us to the burgeoning world of digital influencers: computer generated personas that are used to tout brands as much as "real" celebrities do. They have their own social media accounts and rabid fans. Shudu, "the world's first digital supermodel," has 80,000 followers. Despite an open declaration of her unreality, some of these followers have established a bond with her, sharing personal stories and anecdotes with her creator.

Digital influencers engage in social advocacy, launch fashion brands and make big splashes in the press. They're chillingly effective, and why not? Flesh-and-blood human beings also undergo astounding transformations and reinventions with the aid of digital technology, all in the name of setting a trend or starting a craze.

As Shudu's creator Cameron-James Wilson noted in a recent interview: "I think that real people are digital influencers at this point, with the amount of Facetune and manipulation that is going on. People are starting to question what reality even is, and ask 'What is the point of reality, if a digital influencer can put out interesting content?'" says Wilson.

The Takeaway

Truth, beauty, reality. After all these airy abstractions, the words "Federal Trade Commission" yank us back down to earth. But that's the FTC's job: When reality is blurred by a "fake" image, or a celebrity misrepresents a paid advertisement as personal enthusiasm, the Commission is there to protect the unsuspecting consumer.

So, what does the Commission have to say about digital influencers?

Back in September 2017 we reported on the FTC's recent FAQ on endorsement rules, which helped advertisers understand the Commission's stance on the relationship between a company and a person who endorses its products. But are these guidelines up in the air if that person isn't a person at all? Of course not! The Endorsement and Testimonial Guidelines are merely an application of the FTC's 1983 Policy Statement on Deception, explaining what constitutes deception under Section 5 of the FTC Act, to social media endorsement. The 1980s' version of the Guidelines were updated to address social media in 2009. In 2015, the FTC issued a further policy statement applying the same principles to native advertising. But don't wait for the FTC to issue guidance on artificial influencers – the same principles apply: If an advertising message is not clearly an ad, or a speaker (real or fictional) of a promotion is not clearly materially connected to the advertiser, then that must be clearly and conspicuously disclosed in an effective way so the consumer can weigh the objectivity and veracity of the message. So sorry, Shudu, the same rules that apply to the Kardashians apply to you, or rather your publishers! Potentially even more so.

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