Hidden Ad-gendas

Last June, Selena Gomez posted a photo of herself drinking a Coke on Instagram. Visible on the soda’s label is “You’re the spark”—words from her 2015 song “Me & the Rhythm.” Gomez had added a caption: “When your lyrics are on the bottle.”

The photo became one of the most popular images in Instagram’s history, getting millions of likes. But unlike some of the other photos Gomez posts, this was a paid ad.

That Instagram post spurred consumer advocates to take action. TruthInAdvertising.org (TINA), a nonprofit that monitors deceptive advertising, sent Coca-Cola a letter asking why the post hadn’t been labeled as an ad. After TINA’s complaint, the singer added the hashtag #ad to the post, which remains on her Instagram feed.

Product placement on social media is a new type of celebrity endorsement. Because it can easily fool the public into viewing an unidentified ad, it raises issues that federal regulators are struggling to address. “If an individual has a material connection with the company, they are required [by law] to disclose that,” says Bonnie Patten of TINA. “It has to be clear if the content is advertising.”

But part of the problem is that long-standing rules designed to regulate ads on TV and radio are tough to enforce in today’s digital world.

Last June, Selena Gomez posted a photo of herself drinking a Coke on Instagram. Visible on the soda’s label is “You’re the spark.” Those words are from her 2015 song “Me & the Rhythm.” Gomez had added a caption to the photo. It said: “When your lyrics are on the bottle.”

The photo became one of the most popular images in Instagram’s history. It got millions of likes. But unlike some of the other photos Gomez posts, this was a paid ad.

That Instagram post spurred consumer advocates to take action. TruthInAdvertising.org (TINA) is a nonprofit that monitors deceptive advertising. It sent Coca-Cola a letter asking why the post hadn’t been labeled as an ad. After TINA’s complaint, the singer added the hashtag #ad to the post. The photo remains on her Instagram feed.

Product placement on social media is a new type of celebrity endorsement. It can easily fool the public into viewing an unidentified ad. This form of product placement raises issues that federal regulators are struggling to address. “If an individual has a material connection with the company, they are required [by law] to disclose that,” says Bonnie Patten of TINA. “It has to be clear if the content is advertising.”

But part of the problem is that long-standing rules designed to regulate ads on TV and radio are tough to enforce in today’s digital world.    

Companies have been using the media to promote themselves since the early days of radio and TV. In the 1950s, brands wedged themselves into the names of shows they sponsored, such as the Colgate Comedy Hour and Texaco Star Theater. But rising costs and other concerns eventually led advertisers to stop sponsoring their own shows.

In the early 1960s, a more subtle form of product placement took hold. Take the popular TV show Mr. Ed, which featured a talking horse. Alongside the horse, viewers saw a steady stream of Studebaker cars. Studebaker, like many companies, had paid to have its products placed in scenes so viewers would associate the brand with the stars of the show.

Product placement reached its peak in the early 2000s, with TV hits like American Idol featuring Apple and Reebok merchandise. Federal rules require that such sponsorships be disclosed, but many shows bury the disclosures in the closing ­credits.

Moviemakers have gotten in on the action too. Blockbusters like last year’s Batman vs. Superman and Captain America: Civil War prominently featured Jolly Ranchers candy, Audi automobiles, and other products.

Companies have been using the media to promote themselves since the early days of radio and TV. In the 1950s, brands wedged themselves into the names of shows they sponsored. Examples include the Colgate Comedy Hour and Texaco Star Theater. But rising costs and other concerns eventually led advertisers to stop sponsoring their own shows.

In the early 1960s, a more subtle form of product placement took hold. Take the popular TV show Mr. Ed. That show featured a talking horse. Alongside the horse, viewers saw a steady stream of Studebaker cars. Studebaker, like many companies, had paid to have its products placed in scenes. They hoped viewers would associate the brand with the stars of the show.

Product placement reached its peak in the early 2000s. TV hits like American Idol featured Apple and Reebok merchandise. Federal rules require that such sponsorships be disclosed. But many shows bury the disclosures in the closing credits.

Moviemakers have gotten in on the action too. Blockbusters like last year’s Batman vs. Superman and Captain America: Civil War prominently featured Jolly Ranchers candy, Audi automobiles, and other products.

Because product placement on social media is so new, the FTC hasn’t yet figured out what makes something an ad on various platforms—or determined which rules govern them, says Michael Ostheimer, an FTC attorney. One big challenge is that celebrities post on social media all the time, usually for self-promotion but also to endorse products. It’s not always easy to tell the difference.

Patten, of TINA, says the responsibility for honest advertising lies not only with celebrity endorsers but also with the companies that pay them. Ultimately, she adds, it’s up to consumers to be aware of what they’re seeing.

“Unfortunately, many of these companies and influencers aren’t following the rules,” Patten says. “So it’s up to [consumers] to be skeptical and aware that anything we’re looking at could be an ad.”

The FTC hasn’t yet figured out what makes something an ad on various social media platforms or which rules apply, says Michael Ostheimer. He is an FTC attorney. One big challenge is that celebrities post on social media all the time. The posts are usually for self-promotion. Some are used to endorse products. It’s not always easy to tell the difference.

Patten says the responsibility for honest advertising lies with celebrity endorsers and the companies that pay them. Ultimately, she adds, it’s up to consumers to be aware of what they’re seeing.

“Unfortunately, many of these companies and influencers aren’t following the rules,” Patten says. “So it’s up to [consumers] to be skeptical and aware that anything we’re looking at could be an ad.”