Brands who pay stars to hawk their products could be in trouble soon

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Social media advertising has become a new norm.

Celebrities like Kylie Jenner can make their livings by posting endorsements for different products on their personal Instagram accounts. 

Now, the Federal Trade Commission is cracking down on the practice, saying it misleads customers, according to Bloomberg. 

"We’ve been interested in deceptive endorsements for decades and this is a new way in which they are appearing," Michael Ostheimer, a deputy in the FTC's Ad Practices Division, said to Bloomberg. "We believe consumers put stock in endorsements and we want to make sure they are not being deceived"

The central complaint the FTC has is that a lot of these endorsements do not clearly indicate that they are paid sponsored content, and they come off as though they are genuine, unpaid posts. 

Being an Instagram star can be a lucrative business: fitness guru Ross Dickerson, who has over a million followers, recently told Forbes that he makes $650 on a "slow day." 

The FTC wants clear disclosures. 

"If consumers don’t read the words, then there is no effective disclosure," Ostheimer said to Bloomberg. "If you have seven other hashtags at the end of a tweet and it’s mixed up with all these other things, it’s easy for consumers to skip over that. The real test is, did consumers read it and comprehend it?"

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The FTC has guidelines that dictate what works and what doesn't fly on social media.

"If you write about how much you like something you bought on your own and you’re not being rewarded, you don’t have to worry," the FTC writes on its website. "However, if you’re doing it as part of a sponsored campaign or you’re being compensated – for example, getting a discount on a future purchase or being entered into a sweepstakes for a significant prize – then a disclosure is appropriate." 

Influencer marketing isn't likely to go away, though, because it communicates to millennials in an effective way.

"It's a conversation that they can have almost nonstop through the day, every day, over the course of 365 days a year," Edward East, CEO of influencer-marketing company Billion Dollar Boy, said in an interview with Business Insider earlier this summer.

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