How Fyre Festival Changed Laws For Instagram Sponsored Posts

There’s no way around it: Fyre Festival was a fiasco.

In fact, it was such a colossal shootstorm that both Hulu and Netflix made documentaries about it, and a number of celebrities who were social media influencers have been under fire ever since. Not to mention that this one event changed the laws surrounding Instagram sponsored posts and Instagram sponsorship in general. (See our sponsored content guide here)

But what really happened, and what can we learn from it so we don’t make the same mistake?

Let’s make the most out of the Fyre Festival fiasco!

What Really Happened at Fyre?

Fyre started out benign.

Well, as benign as it could be considering that a marketing agency famous for making memes and stirring up things called F*** Jerry was behind it. In their defense, they couldn’t foresee how much of a cluster f Fyre was to become.

At first, Fyre was supposed to be the achievement of the millennial lifestyle dream – a music festival in the Bahamas where “normal” people and celebrities mingled while Kanye West, Migos and Blink-182 played in the background.

Sounds pretty perfect, right?

The promotional video looked even better.

 

The initial purpose of the festival was to promote Billy McFarland and Ja Rule’s talent-booking app.

With just one click of your fingertip (and a significant budget), you could get influencers and singers to appear at your birthday.
Fyre Festival was supposed to serve as a brand awareness campaign, really.

However, things went wrong really fast.

The marketing was perfect, but that was about it.

While people swiped credit cards left and right (and even quit jobs because their bosses wouldn’t give them the time off) to pay for $22,000 villas for the weekend, the executive team behind the festival was…

Well, they were pretty much living the Fyre lifestyle.

fyre festival founder
Wait, we were supposed to organize the festival after promoting it?

When the time came for Fyre to take place, the participants boarded the planes and set off for Exuma, the Bahamas.

Now, you can use your imagination to paint the picture of what happens when hundreds of people pay a lot of money to visit a festival flush with a lavish lifestyle, while the entire team behind the festival had effectively two weeks to organize it.

If you need some help, this is what happens:

fyre festival tents
“Luxury villas” – in reality, FEMA tents
Fyre Festival Food Post
“Michelin-grade catering”

Like we said, a complete and total shootstorm. The best part?
Since so many people and influencers who weren’t celebrities went and paid to go to Fyre, it was all live-streamed.

To cut the long story short, the organizer was tried for wire fraud and other things, it turned out that suppliers and local Bahamian workers weren’t paid, and it’s a hot mess.

Hot because there were supposed to be models, but also because it’s a steaming pile of the Millennial Dream instances gone wrong.

Suddenly, the rich kids of Instagram weren’t having such a great time. And schadenfreude present in the 99% of the population who watched it happen from the beginning started coming out.

Fyre Festival Punters
No one could contain the glee they felt because it all went wrong

 

Now, yeah, the festival was a complete mess.

But the marketing was great!

How Did Fyre Festival Change Sponsored Post Laws?

Let’s rewind it back to the beginning.

When F*** Jerry were hired, they wanted to break social media. It was manufactured viral marketing, and how did they do it?
Step 1: Find the most influential influencers.
Step 2: Pay them loads of money to post orange squares tagging Fyre Festival.
Step 3: Profit.

It sounds too simple to work, but it did. When the likes of Bella Hadid and Kendall Jenner started posting orange squares, everyone stopped scrolling.

Bella Fyre Festival
It was genius, and then it was evil.

Everyone was wondering: what the heck is happening with the orange squares, and why are influencers posting them? It was like a private joke, and only the influencers were in on it.

Influencers’ enthusiasm about Fyre translated to their followers. Everyone presumed that, if influencers were excited about this (and they weren’t paid to be), then the festival had to be mind-blowing.

Fast-forward to May 2017 (post-Fyre) and people were starting to get really angry.

Some of them had spent tens of thousands of dollars on a one of a kind experience where they could brush elbows with their favourite influencers and become a part of the lifestyle they could previously only see on their Instagram feeds.

And it was taken away from them. In fact, it turned out to be a total fraud.

And who did the aspiring festival-goers blame?

Influencers like Jenner, Ratajkowski and Hadid, many of whom hadn’t disclosed that they were being paid to promote Fyre Festival.

For example, Kendall Jenner, who was paid $250 thousand for the post about Fyre Festival, didn’t even add a #ad hashtag to show the nature of the post.

Instead, she dropped hints that some of the members of the G.O.O.D. Music would be performing and that her followers could use her discount code to get tickets for Fyre.

Generally, the Federal Trade Commission requires influencers to add the #ad or #sponsored hashtag, or any other kind of label that would state that a post was an ad.

The rule wasn’t applied as strictly before as after Fyre Festival. Before, influencers could fall into the cracks because no one would check.

The worst that could’ve happened was being called out by followers.

But post-Fyre, the Instagram sponsored post landscape changed.

Their followers did call them out – in a lawsuit.

Instagram Sponsorship Guidelines after 2017

After the entire thing with Fyre went down and numerous influencers were being called out (and prosecuted) for not disclosing that they were being paid to be enthusiastic about the festival, it was clear that the rules regulating Instagram sponsored posts had to change.

First, the Federal Trade Commission Started Sending Warning Letters

It didn’t take long for the FTC to react. Influencers haven’t been adding #ad, #sponsored, #spons or similar hashtags enough. Everyone was cutting corners.
So in response to multiple breaches of guidelines (the catalyst being the Fyre Festival), the FTC started enforcing their endorsement guidelines.

sponsorship laws fyre festival
No one’s gonna check? Better check that again.
 This is the FTC warning letter template (sent to influencers like Naomi Campbell and Lindsay Lohan).

Just in September and October 2017, the FTC sent over 20 warning letters to big-name influencers.

And since this directly concerned Instagram…

Instagram Rolled Out a Paid Partnership Feature

Long gone were the days of free-for-all Instagram sponsorships. Instagram took the FTC’s guidelines seriously and added a new feature for influencers with high level of engagement.

The paid partnership feature makes it easier for influencers and brands to state that they’re conducting commercial activity.

In addition to disclosing the commercial nature of the post, the paid partnership feature also helps brands see how their content is performing.

Since this feature also works for Instagram Stories, there shouldn’t be any problems, right?

According to Later.com, the FTC doesn’t necessarily think that Instagram is doing all they could be.

The main point of contention has been the placement of the disclosure. If it doesn’t catch the viewer’s eye, how are they supposed to notice it among all the shiny sponsored things?

However, the FTC still believes that responsibility is on individual influencers and businesses, and not the platform itself.

ASA and CMA Collaborate on Creating a Guide to Instagram Sponsored Posts

Since not only the US influencers could be used for evil means (AKA: promoting a festival that turns into a trash heap where participants have to sleep in emergency tents), the UK’s Advertising Standards Agency and Competition and Markets Authority collaborated on a guide on being legal on IG for social media influencers.

All joking aside, the disclosure of ads on Instagram and social media, in general, has become a pretty big deal ever since Fyre, with both followers and authorities calling for more transparency.

instagram paid post
All it takes is one #sponsored or #ad hashtag.

ASA and CMA’s guide is great at explaining what influencers should know. And it helps that the guide is literally titled:

“An Influencer’s Guide to Making Clear that Ads are Ads.”


Should We Expect More Confusion Surrounding Instagram Sponsorships?

Honestly, no. The rules are pretty clear, and the majority of influencers have no problems adhering to them.

The Instagram crowd is a pretty good one, too. The users love interacting with brands and sponsored content (the engagement with brands on Instagram being 10x higher than on Facebook, 54x higher than on Pinterest, and 84x higher than on Twitter).

All they (and authorities) are asking for is more transparency when posting ads.

And some content and value alignment isn’t bad, either.

Just make sure you’re not promoting the next Fyre Festival. The world can’t handle a re-run of that.

Should You Be Using Sponsored Content In Your Marketing Strategy?

In short, yes. Paying for content placement is totally legit and has been around since before the internet.

More and more businesses are turning to paid placement as media, blogs, and influencers ignore press releases.

For more information on sponsored content and how you can use it in your business, see our sponsored content guide here.

 

Carl Thompson

ABOUT THE AUTHOR | Carl Thompson
17 years of playing in the digital marketing space. Over that time Carl has worked with many companies, created a clothing label, and co-founding tech companies Tradegecko.com, Bronami.video, and Contento.marketing

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