Celebrities are being investigated for social media advertising practices

Social Media Advertising - Woman's head - Media

UK regulator wants full disclosure from celebrities who endorse products on social media.

Many celebrities and other influencers use social media advertising to endorse products for companies who pay them to do so. While there is nothing illegal about this practice, the UK regulator Competition and Markets Authority (CMA) is investigating celebrities and other influencers amid concerns that these celebrity social media users are not making it clear when they are paid to endorse products.

Celebrities were warned by the UK watchdog that they were breaking Britain’s consumer laws.

As part of its investigation, the CMA has reportedly written to a range of unnamed celebrities to gather more data regarding their business agreements with brands. The regulator has also asked the public to share their experiences as part of the social media advertising investigation, reported Reuters.

According to the CMA, it has seen posts from influencers that appear to promote items or that offer the influencer’s personal endorsement of a product, but it wasn’t clear if the post had been paid for by the brand being advertised.

Social media advertising brings in big money for celebrities and the brands they endorse.

“If people see clothes, cosmetics, a car, or a holiday being plugged by someone they admire, they might be swayed into buying it,” said George Lusty, the CMA’s Senior Director for Consumer Protection, as quoted by Reuters.

As this is the case, Lusty said that it’s important celebrities and influencers clearly state whether they have bought the product themselves or if they are endorsing it because they have been paid or thanked in some way by the brand.

Celebrities and other big-time influencers who are paid by brands to endorse their products make a notable chunk of change. In some cases, brands will reportedly pay anywhere from $10,000 to over $100,000 for a single social media post.

In fact, according to social media analytics firm HopperHQ, top celebrity social media influencers, such as Kylie Jenner, Selena Gomez and Cristiano Ronaldo, can earn up to 1 million dollars per post on Instagram.

Social Media Advertising - Woman's head - MediaWhile many celebrities indicate when their post is social media advertising by using hashtags such as, “#sponsored” or “#ad,” CMA wants to make sure that all major influencers are being transparent in their posts if they’ve been paid by a brand to endorse a product.

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