Now Trending: Instagram Cracks Down on Ads

October 20, 2020: Instagram cracks down on proper disclosures; TikTok deal affects majority of marketers; new businesses emerge that diversify influencers’ revenue streams

Here’s what’s worth knowing this week:

Table of Contents

Instagram Cracks Down on #Ad

The Story

Instagram CEO Adam Moseri has announced the platform will do more to ensure influencers properly disclose when they have been incentivized to post.

Go on…

Following an investigation from a U.K. watchdog called the Competition and Markets Authority (CMA), which found Instagram was failing to protect consumers from being misled, the platform has committed to a package of measures to ensure greater transparency between brands, influencers and consumers.

Break them down for me.

In case you don’t want to read through all the legalese here, we’ll break down the most significant updates for influencers and brands below:

For influencers:

Expansion of “Paid Partnership” tool: The tool, which appears below a user’s name to display the advertiser relationship, will be extended to all users globally.
Pre-post disclosure prompt: Ahead of posting, users will be prompted to confirm whether they have been incentivized in any way to promote a product or service.
New algorithms: Instagram has said it will deploy technology and algorithms to assess when users may have not disclosed when their post was sponsored.

For brands:

New tool to understand promotions: Instagram has said it will create a tool to help brands to detect potential advertising content (posts where it appears products are being promoted) and to request the removal of unauthorized or inadequately labeled posts. The tool will also give advertisers more data (think: conversion and brand-lift metrics) to encourage them to require influencers to disclose their relationships.

Instagram has committed to making all of the changes (detailed here) by June 2021.

STC POV

According to a recent study, more than three-quarters of incentivized influencer posts hide the required disclosures beyond the main caption, meaning users need to expand the text for the disclosure to be seen. Spoiler alert: that’s illegal. In case you’re in need of a refresher, disclosures are required any time there is a financial, employment, personal or family relationship with a brand. ICYMI, we have an entire guide on FTC disclosures here.

Circling back to Instagram, you’re probably wondering — what does this mean for me? Simply put, moving forward, all sponsored posts on Instagram need to be posted through the branded content tool — it will soon no longer be OK to put up a post and use #ad, now that all Instagram users will soon have access to the tool that allows them to properly disclose. While previously, rules around disclosures on Instagram have been murky, it’s clear that Instagram is now putting its proverbial foot down. It’s important for brands to brief influencers on these new changes, especially because failure to abide by these rules will likely impact the brand, not the influencer.

TikTok Deal Affects Majority of Marketers’ Ad Plans in 2021

The Story

According to a new survey, 73% of marketing executives said a deal for Oracle and Walmart to buy TikTok would affect their advertising plans for 2021.

Go on…

Among the marketers who said the TikTok deal will affect their plans, the most common impacts would be changes in ad products (94%), new consumer behaviors from increased TikTok usage (75%) and new products (38%). In addition, 86% of respondents said they’re concerned the TikTok deal will make Oracle a leader in advertising data, while only 41% said the deal gives Walmart a chance to overtake Amazon in e-commerce.

Where does the deal currently stand?

TLDR; if a deal isn’t reached by November 12, TikTok will be banned in the U.S. The court has set a November 4 hearing date for a follow-up on the TikTok ban in the U.S. app store, while TikTok has continued to combat the U.S. government’s Executive Order with claims that the government’s rationale is based on incorrect information and assumptions.

STC POV

It’s not surprising that a future TikTok deal would impact the majority of marketing executives — especially given just how intertwined the platform is with today’s culture and relevant events. This, understandably, has led to lots of brands finding their way to TikTok, viewing it as a new avenue to not only contribute to mainstream culture, but also reach an extremely captive Gen Z audience (with growing spending power).

Supporting ITC Revenue Streams = New Business Model?

The Story

Influencer-to-consumer revenue streams are expanding — so rapidly that new businesses are launching simply centered around supporting creators and influencers in these ventures.

For instance…

Playbook, an app aiming to be the Patreon of fitness content, just raised an additional $9.3 million in Series A funding. The idea behind the platform is to give trainers new revenue streams through their content by giving them the tools to create videos and grow their audience.
Teespring, one of the biggest platforms for influencer merch, just rolled out the ability to sell digital merchandise (think: filters, e-books, premium content, zines). Teespring also announced a new partnership with TIkTok that enables creators to sell merch directly on the platform (for the first time).
Stir, a creator-first start up, launched a new tool in Presubscribed, which enables creators to get an idea of who will support their new project (think: newsletter, podcast, etc.) by collecting “pre subscribes.”
SignalFire released a Creator Economy Market map that breaks down the top 100 startups and tools for creators.
Airbnb is teaming up with TikTok creators for its Online Experiences product. Through this new offering, people will be able to connect with their favorite TikTok creators to learn new skills in photography, cooking, health and wellness, comedy and more.
PearPop, a new company, lets fans bid for shared screen time with their favorite TikTok creators. The creators set a price for sharing screen time and they can accept/reject bids based on previewing the content.

STC POV

The creator ecosystem is expanding. As part of this, new platforms are launching and established platforms are gaining more traction. With creators looking to monetize their talents outside of traditional brand partnerships, there will be a rise in the companies and platforms focused on supporting and helping creators with the various aspects of running their business (e.g. selling merch, tracking finances, etc.).