The Paid Partnership Disclosure Dilemma
Influencers don’t like to be transparent about their brand deals. Gen Z is starting to catch on, and soon the FTC will as well.
Are Gen Zs making enough money? Depends on who you ask.
Over the weekend, the Wall Street Journal published an article about TikTok's impact on Gen Z spending habits. On an application where you can see a creator post about their journey paying off $30,000 in credit card debt immediately after a video of a creator showing off their $600 Dyson Airwrap, $50 Stanley Cup, and $100 skincare product, the value of money can be confusing to comprehend.
It’s perplexing how in a time where the cost of living is tremendously high, the job market is extremely competitive, and dreams of owning a house are far off, people are actually doing very well. A couple of weeks ago, The Economist published an article about Gen Z’s historically unprecedented wealth. According to a study by think tank American Enterprise Institute’s Kevin Corinth, Gen Z is better off than millennials and Gen X were in their 20s, and the average 25-year-old has a household income of over 40,000 — over 50% more than baby boomers at the same age.
Despite the numbers, social media makes things tricky. The constant reminder that financial responsibility is difficult met with the pressure to spend makes for a consumerism-focused experience that can have negative impacts on a person’s bank account and well-being.
Some influencers consistently post about their favorite beauty, fashion, cooking, and household items. It becomes so commonplace to see creators posting about all of their favorite items, or subliminally referencing them in a video. This is most commonly seen in “Get Ready With Me” videos, where influencers get the opportunity to feature a handful of products in on TikTok.
However, in many videos, the creator fails to disclose that these items were gifted by the brand, or a part of a paid partnership. This isn’t just morally wrong, but it’s actually against Federal Trade Commission (FTC) regulations.
In April, marketing analysis creator Bee Better posted a video about influencer Haley Kalil’s misleading sponsorship with Kiehl’s skincare. She failed to disclose the paid partnership in a video — intentionally shrinking the #kiehlspartner text and putting it in the upper right-hand corner. Bee better called this video “highly deceptive” and “illegal,” explaining how Haley should have clarified that this video was a paid partnership. He followed up with a video after explaining how more influencers need to be held accountable for this — and when beauty creator Mikayla Nogueira says a skincare product cleared her cystic acne, she’s probably being paid because she’s said the same thing about five other brands.
With TikTok’s heavy influence on a person’s spending habits, the nature of influencers consistently promoting products without disclosing them creates an overconsumption problem and a lack of trust among the community. It’s also making viewers from afar feel a lot less wealthy.
Consumerism final boss
You’ve probably heard an influencer tell you that you need to buy “these five essential shoes for your trip to Europe this summer.” Or, they show you their elaborate coffee recipe, claiming that they never buy lattes out of the house anymore because it's so good. Or, they take a first-class flight from JFK to London to go to a brand’s event.
What influencers won’t tell you is that three of those five shoes were sent to them as PR. Or to make their coffee, they use their $1,000 espresso machine that was gifted to them by a brand. They won’t always share that when they go to that event, the brand that hosted them paid for their first-class flight.
The problem is not only that creators are being unethical by failing to disclose these details, but they are also influencing their followers to go out and purchase these items. Influencers will take money from brands to create videos about their products, leading their audience to impulse buy their recommendations. As a result, a lot of people own things they don’t need.
One of the most prominent products promoted on TikTok in the past year has been the Stanley Cup. Gen Z has grown to love the large thermos with a handle and straw so much that the Stanley accessory industry has blossomed. One creator on TikTok named Caitlin, who has nearly 189,000 followers, recently showed off her Stanley Cup snack trays, fitted ice cubes, and special straw topper. Someone commented, “Is there something wrong with normal ice?” Another creator named Emily who has over 262,000 followers posted a video of her packing her Stanley cup backpack — a small pouch attachment for the cup where she put a small fan, hand sanitizer wipes, Summer Fridays lip balm, and Loccitane hand cream (yes, both viral products on TikTok). The most liked comment on the video? “Consumerism final boss.”
It’s unclear whether or not Caitlin and Emily were gifted the items in their videos. However, at the size of their following on the app, it’s clear that their spending habits have a far reach, and encourage people with less money to spend their dollars on things they don’t need. If they disclosed that they received the items they posted about for free, it might help mitigate this problem.
Crumbl-ing trust
When an up-and-coming influencer receives their first requests from brands to create sponsored content around their products, they’ll likely do it. After all, without a manager to help direct their brand identity, it can be hard to turn down $500 and free items in exchange for a video.
However, this unfortunately leads many creators to promote items that they actually would never use — or don’t even like. When they don’t disclose that they are paid to promote these products, it leads viewers at home to believe that these products are truly worth their money.
Over the past two years, there have been a few examples of influencers promoting products including the Bloom Nutrition green drink, Gymshark fitness wear, and Hoka running shoes that other creators have come out and said aren’t worth the hype despite their large prominence on the app. Creator Marianna Moore shared how influencers who get sent Bloom’s green powder will read the benefits off of the back of the container without trying it themselves — contributing to the lack of trust among influencers and their audiences.
Recently, another TikTok-famous food is starting to become de-influenced: Crumbl Cookies. Founded in 2017 and currently with 918 stores open across the country, this cookie bakery knew how to play the social media game from the start. Every week, Crumbl releases six new elaborate flavors of elaborate cookies that are made to look good on camera. So good that on TikTok, it has become a trend to review Crumbl cookies of the week. The brand has been able to cultivate a following of 7.5 million on TikTok due to the hype around their weekly releases. This week’s menu includes pink velvet cake and raspberry cheesecake, which has already been featured in multiple creators’ videos.
However, it’s unclear as to whether or not Crumbl pays its creators to make these videos. Some people have called them out for doing so because they don’t think Crumbl’s cookies taste very good.
Last month, Bee Better posted a review of the six Crumbl cookies of the week. Per his caption, the taste test was surprising — and not in a good way.
“We will start with the basic chocolate chip cookie because if you mess up you have really no business calling yourself a cookie business,” he said at the start of the video. After taking a bite, and showing disgust on his face, he asked “I’m sorry am I hallucinating? Who’s paying you guys? No seriously, who’s paying you guys to say these cookies are good?”
It’s not often that creators post a negative review of Crumbl — so of course, the video came as a shock to viewers. So did the realization that Crumbl probably gifts influencers its cookies, therefore why an overwhelming number of videos about these cookies are positive.
So why not switch on the paid partnership toggle?
TikTok would be a better platform if creators who posted products were honest about their brand deals. Unfortunately, we’ll likely continue to see influencers post share recommendations of items they received for free or were paid to post about.
Creators often share the sentiment that sponsored content doesn’t perform as well as organic posts, and has the potential to hurt their engagement metrics all while doing their job. Typically, viewers will swipe past ads or videos of paid partnerships rather than liking or commenting on a video. The last thing an influencer wants is to intentionally deflate their engagement.
The only thing that will urge influencers to start disclosing their brand deals is for FTC regulations to become tighter and for government agencies to have stricter rules on what influencers can and can’t do. This might help people stop impulse buying and start trusting influencers again.