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(Instagram did not return request for comment). “This whole strategy by the FTC is ineffective because smaller brands and influencers think there isn’t a risk to being caught,” Gil Eyal, founder and chief executive of influencer marketing company HYPR said. That may change soon, however, after the disastrous Fyre Festival left thousands of concert-goers stranded on an island in the Bahamas . The music festival was promoted by a number of high-profile influencers, including Kendall Jenner, who was reportedly paid $250,000 for her post about the event. Eyal said lawsuits emerging from the festival are holding such celebrities accountable for the first time. “Because they didn’t disclose it was a paid promotion people can create a legal connection between the fact they lost money and the post by the influencer,” he said. “It’s really a watershed moment.” Many celebrities also hide their warnings or attempt to make them inconspicuous, hiding small hashtags like #SP to mean “sponsored” among a list of unrelated hashtags, something the FTC has explicitly warned against. Because of the increasingly scattered nature of online influencers, it is much more difficult to determine what violates FTC rules, said Josh Ong, director of marketing at mobile tools provider Cheetah Mobile. He said many celebrities also hide their warnings or attempt to make them inconspicuous, hiding small hashtags like #SP to mean “sponsored” among a list of unrelated hashtags, something the FTC has explicitly warned against . Many people on YouTube GOOG, +0.24% also put disclaimers below the fold, meaning viewers have to click “read more” to see the short warning that a video is sponsored.
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