Influencer marketing is HUGE on social media. In case you are unfamiliar, influencer marketing, or affiliate marketing, is when a brand compensates an individual to promote a product or service. Typically, you can spot influencer marketing because the influencer will have a special promo code, like “Lindsay20” so the brand can track how many sales are made because of the influencer.
Who is an influencer? Literally anyone. Large public figures could be paid thousands, even upwards of a million dollars for just one social media post. But then there are people like me who do commission-based affiliate marketing. For example, I love the company Rakuten. It’s a free cash-back app I use. If I mention it to someone, I’ll send them this link. If they sign up and make a purchase over $25, they get $10 cash-back and I get $10 as well. See how that works?
This obviously raises the concern of people promoting products they don’t actually use because they are getting paid. That’s why the FTC (Federal Trade Commission), has publicly announced that they are reviewing the current disclosures and penalties. Right now, the rule is that an influencer must disclose their affiliation with the product. That’s why you’ll see some posts with #sponsored or #ad under them. However, if someone breaks this rule, there isn’t any real penalty other than a slap on hand and a sad face emoji.
So while the new rules are not yet in place, if you are using any affiliate marketing, you MUST begin regulating what is being published to ensure disclosures are present. There will be a monetary penalty coming soon. When and how much? That is still to be determined.