Celebrities begin to post promotional ads to their Instagram accounts

Beyonce drinks Pepsi on InstagramIt’s the ongoing question with social media – how do you make a big network earn money and how do you regulate celebrities bypassing regulations to promote products?

Nowhere is this issue more pertinent right now than on Facebook’s $1bn acquisition Instagram, which still does not feature advertising anywhere on the network.

In fact, the problem is even greater than that, as celebrities and brands seek to use the popular platform for their own ad deals, and cut out the Facebook middleman.

Brand spokes people are using their accounts to mix obviously promotional pictures into their stream.

A recent example of this is Nicole Richie sending an ad for a Unilever hair product direct to her 750, 000 Instagram followers in a post marked as an ad and linking to a microsite of videos relating to the Suave hair product. According to AdAge:

A Unilever representative confirmed that the deal was done as part of its partnership with Ms. Richie, not via Facebook or Instagram.

She has also published images of Givenchy products, but Nicole Richie isn’t the only one doing this either.

Beyonce just three days ago pic posted a pic of herself drinking Pepsi (above), for whom she acts as a brand ambassador, to her 3.2 million followers. It looks like an advertising shot and is titled “Bey for Pepsi”.

A little while before that she posted a pop-art collage image of her and a can of Pepsi. Kim Kardashian posted a picture of her with her brand of tanning lotion to her 7.6 million followers. Unlike Richie, neither marked this as an ad, so could fall foul of Federal Trade Commission Guidelines.

In the UK this is going to become an issue for the Advertising Standards Authority, which has growing experience with social media ads.

A similar issue befell Katie Price and Rio Ferdinand, who both took part in a Twitter campaign for Snickers. They tweeted a series of uncharacteristic messages before delivering the “you are not yourself when you’re hungry” punchline and picture of them holding a Snickers. Although the tweets were marked #spon, the ASA investigated. Again the brands bypassed the networks, and used the celebrities and their following.

Price did have a recent branding issue with Twitter though. TOWIE star Lauren Goodger shared a picture from the glamour model’s fourth wedding. Price had, naturally, signed a lucrative exclusive deal for the pictures and had asked guests not to share their own personal snaps.

By not building a revenue stream into Instagram from the early on, Facebook have left itself open to this kind of campaign being run by celebrities and brands who have a large following in their own right.

The same issue is not arising for Twitter. In highly visual, sharing networks, brands do not require an official advertising network or tool, and can simply create content and take a DIY approach to promotion.

It’s product placement for the digital age, and we can expect to see a lot more this in the future, perhaps with some clearer guidelines.