[By: Mallory Schlossberg] [Business Insider] [Read More]
It's no secret that Instagramming is making some people rich.
Look no further than the infamous laxative-esque Tea Detoxes, for which celebrities and Instagram personalities can make up to hundreds of thousands of dollars.
Those personalities, or "influencers," have figured out how to make bank by posting to Instagram.
“A low day is like $650,"Instagram star Ross Dickerson, who has over a million followers, said to Forbes contributor Jay McGregor.
McGregor notes that paying Instagrammers these wads of cash can go wrong, because in turn — the very thing that makes these people rich — endorsements — often blur the line between what's officially "native advertising" and what is slyly trying to slide into someone's Instagramming feed, pretending to be something it's not.
He points to how the FTC has constructed guidelines that dictate what's passable and what's not on social media.
"If you write about how much you like something you bought on your own and you’re not being rewarded, you don’t have to worry," the FTC writes. "However, if you’re doing it as part of a sponsored campaign or you’re being compensated – for example, getting a discount on a future purchase or being entered into a sweepstakes for a significant prize – then a disclosure is appropriate."
But despite these guidelines, McGregor writes that sometimes they fail to disclose that the contents are ads. He points to a 2015 Lord & Taylor campaign as an example, in which the company hired 50 "influencers" to market their apparel. The campaign landed the retailer in trouble with the FTC, and a settlement was reached earlier this year.
But the message was resounding.
"Lord & Taylor needs to be straight with consumers in its online marketing campaigns," Jessica Rich, director of the FTC’s Bureau of Consumer Protection, said in an article discussing the settlement. "Consumers have the right to know when they’re looking at paid advertising.”
Still, influencers and social-media personalities have become valuable resources for marketers who are looking to lure fickle millennials and Gen Z-ers, because they can do something that traditional celebrities cannot do.
"It's a conversation that they can have almost nonstop through the day, every day, over the course of 365 days a year," Edward East, CEO of influencer-marketing company Billion Dollar Boy, said in a recent conversation with Business Insider.