As of today, eight civil lawsuits have been filed against entrepreneur Billy McFarland and rapper Ja Rule, the founders of the now infamous Fyre Festival. The luxury music festival was promoted by digital influencers, like Kendall Jenner (pictured above) and Bella Hadid. However, the founders spent too much money on advertising and not enough on the actual production of the festival. For more information about the problems with the festival, read this article by the New York Times.
Another party could also come after the digital influencers who promoted the Fyre Festival: the Federal Trade Commission (FTC).
Why? Read below.
Who is a Digital influencer?
A digital influencer is a person who has a large number of followers on popular social media platforms (ex. YouTube and Instagram). Influencers span all industries and frequently provide commentary. Thus, some influencers are makeup gurus, while others discuss current events or healthy habits.
Why are Companies Interested in Digital Influencers?
With the increased popularity of social media, companies have learned to morph their marketing and advertising strategies. Companies love digital influencers because they readily gain access to audiences that they previously may not have been able to reach. Thus, companies now send influencers products (or events) to review or endorse on their pages.
What is the FTC?
One of the responsibilities of the FTC, a federal government agency, is to protect consumers from fraudulent advertising and marketing. If a person is compensated by a company for an endorsement, a clear disclosure of this material connection is required.
Most people are familiar with the manifestation of this FTC rule. When a celebrity endorses a product in a television commercial, audiences see disclaimers at the bottom to let them know about the arrangement between the celebrity and the company (or hear a fast-speaking announcer explaining that the connection).
How does the rule apply to digital influencers? If Kim Kardashian praises a new lotion on Instagram, the FTC would require her to make clear in her post that the company paid her. (An aside: I looked at several of her posts for which I believe she was paid and saw no such disclosure.)
The Digital Influencers of the Fyre Festival
The Fyre Festival founders paid several digital influencers to promote the event. The influencers who did not provide the necessary disclosure could now be investigated and fined by the FTC.
If you have any questions about digital influencers or advertising law, contact us here.
