MARCO ISLAND, FL — In a season when “influencers” are facing a backlash and a crackdown, the digital advertising trade body has urged the industry to clean up and be transparent.
After the SEC charged Kim Kardashian $1.26 million for unlawfully touting a crypto security, Lartease Tiffith, EVP, Public Policy, IAB, says both brands and influencers need to be careful.
Kardashian did not disclose she was paid $250,000 to post about EMAX tokens on her Instagram account.
Tiffith sees more influencer activity, and more regulatory scrutiny.
“Right now the FTC and SEC are focusing on the biggest celebrities, the biggest brands – that’s the first place they’re going,” Tiffith says. “But they’re going to start going into other ones, too.
“So I think for all of them, I think they need to think about making sure that whoever they’re working with discloses the relationship.
“For influencers, they should want to do this because the reason that they have those brand endorsements and deals. All of a sudden, if they get in trouble for not following the law, that can really be significant problem for them as well.”
Disclosing an ad placement with a “#ad” tag may not be a high enough bar for financial products.
“It wasn’t sufficient enough for the SEC,” Tiffith says. “These are financial products and the harm for consumers is greater than if someone had said, ‘Hey, I’m gonna buy a certain toothpaste or toothbrush’.
“The harm to the consumers is not as significant as the harm for someone who’s going to make an investment of their money, their retirement savings into a crypto product, an NFT, thinking, it’s going pay off and then they end up losing a lot of money.”
So his advice is to call the lawyers, to write disclosures into influencer contracts.
“Make sure that they have it in their contracts that they’re going to disclose the value they’re receiving,” he says, adding that this should include non-monetary benefits.
“Brands should want to protect their brand, as we all know. We are seeing now, with this crackdown on endorsements that are not being disclosed, that there’s blowback to brands when that happens.”
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