FTC Wants Instagram Influencers Transparent, Sponsorship Money To Double

 mediapost.com  4/21/2017 8:37:05 PM   Gavin O'Malley

By 2019, the sponsorship money that Instagram influencers pull in is on pace to more than double — from about $1 billion this year to nearly $2.4 billion.

That’s according to fresh estimates from marketing firm Mediakix.

The FTC is threatening to spoil the party for influencers if they don't do a better job of disclosing their financial arrangements with sponsors. 

Just this week, the agency said it contacted 90 or so Instagram influencers and warned them about being more transparent.

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Yet with $1 billion-plus at stake, the number of brand-sponsored influencer posts on Instagram is on track to more than double from 14.5 million this year, to 32.3 million, in 2019.

That poses a problem for Instagram, because many users essentially see sponsored posts as a form of spam.

Parent company Facebook is increasingly relying on Instagram to drive revenue growth. In fact, Instagram will make up 20% of Facebook’s domestic mobile revenue this year -- up from 15%, last year -- eMarketer estimates.

That has meant more ads. Showing the extent to which the once ad-shy platform has gone commercial, Instagram even recently began rolling out full-screen, “sound-on,” auto-play ads in Stories.

As of March, Instagram's global community exceeded 600 million users.

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