money·6 min read

The Shady World of TikTok Advertising — And Why It’s A Problem

A phone laying on a keyboard with the TikTok logo on the screen
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Jul 20, 2022

Over the past few years, TikTok has become a hub for new trends (we see you, Barbiecore and feral girl summer), book recs, travel inspo, mental health tips, and everything in between. So it's no surprise that the platform influences how people spend their money. 

While scrolling through sponsored content can be annoying enough, there's also a shady side to the world of TikTok advertising. That’s according to Sara Morrison, senior reporter at Vox Media. Our “Skimm This” team caught up with her to understand what’s going on with TikTok ads from influencers — and why it’s an even bigger problem than you might think.

The laws of TikTok advertising

Influencers and brands are supposed to disclose sponsored content with “branded content tools. To clearly show that what you're seeing is an ad. But, just like staying within your screen time limits, it doesn’t always happen. 

“I don't think anybody who uses TikTok or really any of these platforms is particularly surprised to find out that things that they see are ads that aren't marked as ads,” said Morrison. “I don’t know how many of them are intentionally trying to deceive their audience — I think a lot of them just do hashtag ‘the brand’ and maybe think that's enough.”

And disclosing ads isn’t just a matter of social media etiquette. It’s federal law, under the the Federal Trade Commission’s Guides Concerning the Use of Endorsements and Testimonials in Advertising. Consumer protections for TV and internet ads have existed for decades. The reason? So people don't get ripped off.

“You want people to know that you've been paid to tell them that product is good…And the people watching it will sort of take that with a grain of salt and make a more informed decision of what they’re purchasing. That's why we have them,” Morrison said. “When the internet and social media come along, it's a lot harder to know where all these things are happening.”

Why influencers are bending the rules with TikTok ads

It's a slippery slope when social media stars don't have to play by the same rules with their TikTok ads as an ad for medicine on TV. And even big influencers aren’t following those rules. See: TikTok megastar Charlie D'Amelio. If you watch the video below, it's clear that she's promoting Muse water. But it doesn't follow the FTC's guidelines.

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But it's not just TikTokers with millions of followers who are breaking the rules. Morrison first started investigating the sketchy side of TikTok ads after hearing about undisclosed ads for Feet Finder. 

"People were signing up [for Feet Finder]. It's $5 a month to 'sell photos of your feet.' People were seeing accounts they're fans of saying, 'you can make tens of thousands of dollars doing this.' So not only are they putting pictures of their feet on a fetish site, but they're also paying to do that...You can see where it's a lot more damaging than other [cases]." 

So why aren't these companies following the only guidelines they're required by law to follow? First: money. Influencers can make hundreds of dollars per sponsored post. And if you’re a celeb or a big time creator, you might even make millions (hi, Kylie Jenner).One estimate says US brands will spend more than $4 billion dollars on influencer ads this year. 

Second: posts that are clearly marked as ads might give consumers the ick. And reduce engagement for whoever's posting. And that engagement is crucial for brands to get eyeballs. Because if the TikTok ad feels more “organic” — and less like sponcon — people might engage with the post more. 

Third: there’s a communication issue about the advertising guidelines. “Influencers are random people who got on a platform, got very popular,” Morrison said. “They're not lawyers. They don't have these engines around them that tell them what they are and aren't supposed to do. They’re not getting in trouble for anything, so they’re just going around as they’re told.” 

How undisclosed TikTok ads can impact consumers (aka you)

Worth noting that this isn’t just a TikTok problem: Instagram influencers are notorious for hiding that they’re advertising, too. But TikTok is a particularly dangerous platform for shady sponcon to live on — because the app is more addicting, the audience skews younger, and users are more likely to spend their money on what they see on social media

“You worry that maybe [TikTok users] are more vulnerable to this kind of thing,” Morrison said. “TikTok is seen as being much more engaging. People statistically spend more time on it than they do on these other [platforms]. So they're more exposed to this kind of stuff.”

Even though TikTok itself has largely been shielded from responsibility, influencers, brands, and marketing agencies can be held responsible legally… 

  • On the state level: State attorneys general can go after people who aren't following the rules. And influencers and brands can also be subject to private lawsuits, too. But, despite the fact that it’s a multi-billion dollar industry, very few are. 

  • On the federal level: The top dog here is the FTC, aka the agency that sets standards around these ads. They can charge up to $40,000 per violation. Example: One unlucky brand, a detox tea company called Teami, violated FTC sponcon guidelines back in 2020. So the FTC sued them. And two years later, Teami had to return almost $1 million to more than 20,000 consumers. 

If this reminds you of your own FYP, you can report unlabeled TikTok ads by using the report post function on the platform. Or reach out to the FTC through its fraud reporting terminal. But until TikTok takes more of a role in regulating ads on their platforms, it's the users who will get the short end of the stick.

“The real harm might come to the platform itself,” Morrison said. “If something's just full of ads and they're kind of shady, and you know they’re ads, but they're not disclosed as ads, you're just not going to want to use it anymore. And it also just makes you, the user, trust everything less.” 

Hear more from Morrison and her investigation below. 

theSkimm

Many TikTok ads are often undisclosed. But they shouldn’t be. And until that changes, it’s users across the country — and world — who’ll pay the literal and figurative price.

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