Beyond public trust and government regulation, social media will face these tricky but inevitable issues...
Who ensures that the product benefits social media influencers recommend to us are real?
Nobody…in most parts of the world at least.
But in Taiwan, where YouTubers and Instagrammers rival the fame of TV celebrities, authorities are clamping down on product endorsement deals that are key sources of revenue for them. In the three years from 2016 to March 2019, Taiwan’s authorities has imposed 26 fines for exaggeration of product benefits by influencers.
In recent news, Taiwan media reported that a celebrity’s wife has been fined a total of NTD 640,000 (USD 20,750) over the course of two years. This amount represents eight cases where she was found guilty of exaggerating the benefits of health and beauty products she was paid to endorse on her social media accounts.
The news broke on the heels of another famous influencer being fined NTD 200,000 (USD 6,500) for endorsing a DIY cervical cancer detection kit. Evelyn Chen, who goes by the handle ‘Li Ke Tai Tai’ (literally translated, ‘Mrs Science’), contravened Taiwan’s medical devices advertising act. She has a million followers on YouTube and about half a million on Instagram.
The concern over influencers’ product endorsements to protect public interests is not new. The Federal Trade Commission (FTC) in the US and the Competition and Markets Authority (CMA) in the UK have also been increasingly scrutinizing this market. But unlike Taiwan, they have more bark than bite, especially the FTC.
According to a recent article in The Guardian, social media platforms are also guilty of the lack of control. They recommend but do not enforce influencers putting the hashtag #ad on their sponsored posts. Many influencers do not practice it at all.
Since social media is borderless, enforcing fines like in Taiwan may be difficult for the English speaking world. Taiwan’s case is unique, because it is the only country that still officially uses traditional Chinese characters. This isolates its influencers and social media market largely to its own citizens and the brands that sell to them.
“Any level of regulation and legislation has to respond to international law, which is very difficult to do,” said Mariann Hardey, a Durham University assistant professor in marketing, who is skeptical about the efficacy of regulations.
Unlike traditional TV, radio and print journalism, it is hard for one country to enforce its local advertising laws on social media posts that originated from an individual in another.
The influencer marketing landscape is messy right now, to say the least. Besides exaggerated claims, it is also further complicated by fake endorsement posts from teenagers who are “faking it until they make it” as a paid influencer, or brands that pay influencers to “thrash their competitors”.
“But the battle is nearly impossible to win. Children dream of becoming famous influencers, and will do anything to make it. Those for whom influencer is just one branch of a hyphenated job title…won’t care enough about the consequences to follow the rules.”
— “Instagram: beware of bad influencers…”, The Guardian
In the US, Senator Elizabeth Warren has proposed that big tech companies like Facebook, Google, Apple and Amazon should be broken up. Ironically, there’s a hash tag created for it (#BreakUpBigTech ) and a Facebook ad campaign. The plan also includes ‘rolling back’ (i.e. undoing) Facebook’s prior acquisitions of WhatsApp and Instagram.
Whether this is a populist driven political move or genuine public interest is open to debate, but history teaches us that governments like to break up big powerful conglomerates only after they have wreaked havoc. Think back to the 2007 credit crisis and how financial institutions became ‘too big to fail’.
Perhaps public vested interest in social media platforms have also become so strong that they really cannot afford to fail as well. So much attention has been put on thrashing social media companies’ betrayal of public trust on data privacy that few see the other side of the coin — we have become so emotionally reliant on them that if say, Facebook shuts down tomorrow, there may be a public outcry.
Like banks which hold our money, social media platforms hold our emotional deposits and connections. If rumors developed of Facebook shutting down, I’d bet you most folks would be rushing to back up the content in their accounts the same way we rush to banks to withdraw our cash.
In fact, I would stick my neck out to guess that even if the government doesn’t step in, its users might run a crowdfunding campaign or petition to keep it in business. As I’ve explained in “Facebook Plans to Become World’s Biggest Central Bank?”, if Facebook succeeds in launching Facebook coin and became a dominant player in mobile wallets and e-commerce, this comparison to banks might become a reality rather than an analogy!
Even without losing real money, the thought of losing their social media accounts overnight with all their pictures, videos and connections would be unthinkable for many users. One third of the world uses Facebook, WhatsApp and Instagram. If the company went bust suddenly, how would the public react?
When Facebook’s apps went down for a few hours worldwide in March 2019, one user posted on Instagram to say that she “literally went through all the stage of grief”!
What about all the current and aspiring influencers who make a living off having followers they took years to build up painstakingly? Can you imagine the reaction from professional YouTubers and their fans to YouTube shutting down tomorrow?
Speaking of demise, the death of users is also an interesting phenomenon in social media; and I’m talking about actual deaths…
In the good old days we kept photo albums to remember places and people in our lives. When alive, we take them out once in a while to reminisce and when dead, our friends and family do the same. That function has been replaced by social media.
Nobody deletes anything from social media these days. All the photos, posts and now videos; relatives leave it as a record of their dearly departed. Their accounts become a sort of digital memorial for family and friends.
Social media is becoming a digital heaven that keeps growing in population. This, combined with the fact that nobody alive deletes anything from their social media accounts as well, keeps the cost of storage and traffic bandwidth growing for the companies that operate them.
Unlike personal devices or cloud storage accounts, where consumers have to pay to upgrade if they want more memory space, social media accounts do not charge for the posts we create and accumulate on them.
From a business perspective, the costs of running social media platforms will only rise, while the challenges to monetization will also grow with mounting public and government pressure on utilizing user data for selling ads and analytics.
The problem is compounded by the fact that many netizens create fake, alternate and inactive accounts which have little potential to generate revenue for the platform operators. These accounts are also the ones most likely to create spam, internet bullying and trolling problems on social media. In short, they are a cost and a nuisance.
Side note: Most people forget that Facebook rose to ‘coolness’ and prominence because it was limited to Ivy League students and eventually, real people with an email address from a recognized school or organization. That exclusivity and authenticity helped it to displace then leaders MySpace and Friendster where fake profiles and spam were irritating users.