Celebrities warned over social media ads

United States Federal Trade Commission says they must tell fans when they are paid to compliment products

WASHINGTON • Modern Family star Sofia Vergara, supermodel Heidi Klum, former basketball star Allen Iverson and other celebrities have been put on notice by the United States government that they must tell fans about any compensation received for promoting products on social media.

The Federal Trade Commission (FTC), chief enforcer of truth-in-advertising rules, has sent dozens of letters to companies and stars over the issue, including one to Vergara for touting bracelets on Instagram.

Her post on Instagram received more than 75,000 likes, while Klum got 37,000 likes for a photo of herself with a Dunkin' Donuts coffee.

Scott Disick, ex-boyfriend of Kourtney Kardashian, received 118 likes for praising teeth-whitening strips, according to letters the FTC sent to the celebrities in March. The duo found fame on reality television shows.

Reuters obtained copies of the letters after filing a Freedom of Information Act request with the government.

The letters prodded the stars to disclose when they are paid to compliment products on Instagram or other social media.

Actress Sofia Vergara (left) touted bracelets on Instagram, while supermodel Heidi Klum posted a photo of herself with a Dunkin' Donuts coffee.
Actress Sofia Vergara (above) touted bracelets on Instagram, while supermodel Heidi Klum posted a photo of herself with a Dunkin' Donuts coffee. PHOTOS: REUTERS, AGENCE FRANCE-PRESSE

Actresses Lucy Hale, Shay Mitchell, Troian Bellisario and Ashley Benson, stars of the hit teen show Pretty Little Liars, also received letters for praising clothes, such as pineapple-print leggings, potato chips and facial scrubs.

Letters went to more than 35 celebrities and more than 40 companies, including adidas, Cabela's, Chanel, Johnson & Johnson, Dunkin' Brands Group, Hasbro and Yves Saint Laurent North America.

The FTC did not accuse the celebrities of accepting money or products in exchange for the Instagram boosts, but it noted in the letters, which were largely similar, that truth-in-advertising laws mandate that any payments must be disclosed.

As advertising has migrated from television and print publications, it has become increasingly difficult to distinguish it from non-advertising content.

On social media, the demarcation line blurs when stars post family photos, sometimes interspersed with products they are paid to sell.

Mr David Weintraub, owner of DWE Talent Management, helps celebrities make money selling products on Instagram.

Actress Sofia Vergara (left) touted bracelets on Instagram, while supermodel Heidi Klum posted a photo of herself with a Dunkin' Donuts coffee.
Actress Sofia Vergara touted bracelets on Instagram, while supermodel Heidi Klum (above) posted a photo of herself with a Dunkin' Donuts coffee.

"Probably 40 per cent of my roster makes a healthy part of their living via the Instagram endorsement business model," he said.

Someone with 20 million followers on Instagram, Twitter and other social media can earn up to US$75,000 (S$106,000) a post, he noted.

"There is always a discussion about disclosure" in creating a post, he said, adding that putting #ad or #promotion hashtags in a post is adequate, in his view, to prevent any FTC problems.

Probably 40 per cent of my roster makes a healthy part of their living via the Instagram endorsement business model.

MR DAVID WEINTRAUB, owner of DWE Talent Management, who helps celebrities make money selling products on Instagram, notes that someone with 20 million followers on social media can earn up to $106,000 a post

The FTC appears to agree.

In its endorsement guides, the agency said starting a social media post with #ad "would likely be effective" in disclosing that a star has been paid.

Mr Dan Jaffe, head of the government relations office for the Association of National Advertisers, said the FTC letters were a "warning shot... that something more prescriptive is coming. That's my guess."

The FTC settled with department store Lord & Taylor last year over social media posts by select "fashion influencers" who put up photos of a paisley dress.

As part of the settlement, the company agreed to ensure that future paid posts would be identified.

REUTERS

A version of this article appeared in the print edition of The Straits Times on May 11, 2017, with the headline 'Celebrities warned over social media ads'. Print Edition | Subscribe