Does this mean we can expect Instagram to mandate that users add this tag whenever they post a sponsored photo or video? Gil Eyal, CEO of HYPRBrands, said this could also be a move by Instagram to make more money from sponsored posts."It's likely that Instagram recognizes an opportunity to capitalize on a business model their parent company had successfully implemented for influencers on the Facebook Platform", he said. However, sponsored posts without ad labels are in violation of Federal Trade Commission guidelines. Furthermore, the business partner can benefit from knowing the traffic analytics for that particular post, how many Likes and comments it generated, and whether people are interested in the product. Social media users can earn hundreds of thousands for a single post, depending on the number of followers a person has and the kind of Instagram post made. "Influencers" will tag their content with the "Paid partnership with" sub-header whenever a post is part of a brand arrangement.
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"We've been interested in deceptive endorsements for decades and this is a new way in which they are appearing", FTC Ad Practices Division deputy Michael Ostheimer told Bloomberg. However, all that will change with Instagram's newest feature. The tag will also come with a tool allowing the creator and business to check a post's engagement. Creators who use the tag will in turn have access to metrics on how many people saw and engaged with their posts. In this way, they know the kind of social marketing that works best for them. And reality TV star and prolific Instagram user Kim Kardashian reportedly commands about $300,000 per sponsored post on platforms such as Instagram and Twitter.
'This is the first step in a journey as we learn how the community engages with this new tool - and our focus is on gathering feedback, ' Instagram explained. The implication? Instagram influencers may find their engagment declines.