Blurred Lines

Unregulated, Social Media endorsement may not be as smart as advertisers think…

Recently it has come to light just how much some celebrities are being paid to promote brands through social media networks such as Instagram. At first glance we might look at that and shrivel our noses a little… the numbers are clearly carefully calculated on a formula that should deliver value, yet how many of us have bought a product as a result of seeing it endorsed by a celebrity on any social network? Not many I’ll bet, however someone must be buying?

For advertisers there is of course another great attraction: the lack of regulation. Even traditional advertising is barely seriously policed these days: social media far less so. Clearly the costs of monitoring social networks would be massive, and quite where funding might come from is unclear? — in addition to which what would the place of jurisdiction be for something that essentially has global reach? This naturally leads to the temptation to break the traditional rules. For advertisers the question any decent consultant will ask when breaking rules is “how much is the fine?” Let’s say a company breaks the advertising guidelines of their home country using a celebrity endorsement — perhaps advertising a pharmaceutical that requires a warning to consult a physicial before use, in doing so they cross the line and reach 3 million people worldwide (hypothetically) let’s be generous and say that 10% of followers saw that post… 300,000 and of those 0.1% bought product — that’s 3000 sales, the product has a profit margin of $20 — thus $60,000 of sales are made. If the advertiser gets caught and fined $100,000 (highly unlikely) then it wasn’t so smart — but what are the chances of getting caught?

By the looks of some celebrity Instagram feeds it’s fair to say that marketing directors and agencies are pretty confident about not getting into trouble. Marketing of pretty crappy products when you know it’s crappy counts as being on the dark side, however it would appear there are plenty that can live with that. The revenues generated as stated by Cornell University look attractive and would agree with using Instagram to advertise.

For the celebrity there is lots of lovely cash, easy pickings. In the case of a scandal they will get featured across tabloids, broadsheets, websites, blogs etc. and essentially it won’t be their wrongdoing — I mean who expects celebrities to be responsible for what they accept bundles of cash to endorse, do they?

Quite how seriously the followers of celebrities take their endorsements is likely to be dependent on their perceived reputation in relation to knowing about the products — thus a Gwynneth Paltrow will score far higher than a Kerry Katona. Some advertisers will be more discerning about the choices they make, we can’t be snobby about target groups that spend money and help a company meet their commercial aims — there was a huge backlash against a protein company last year for promoting perfect bodies, yet that resonated perfectly with their target group and indeed they backed it up with endorsements of the most shallow reality TV to really reach their audience. Money, it would seem, does not judge.

These blurred lines between social media and advertising, what constitutes the law and indeed how advertisers carry themselves in an unregulated space pose a variety of threats: followers may already just ignore the content, celebrities may whore themselves out too hard, advertisers may see awful click-through and sales, and social networks may lose reputation and thus quality of users. These are all things to be considered and perhaps there are more I haven’t mentioned.

As Williams and Thicke put it:

I know you want it
You’re a good girl
Can’t let it get past me
You’re far from plastic
Talk about getting blasted
I hate these blurred lines
I know you want it

English. Lives in Tbilisi. Contributor to Renegade Inc. Loves channeling ideas and serving good coffee.

English. Lives in Tbilisi. Contributor to Renegade Inc. Loves channeling ideas and serving good coffee.