Social Media Influencers and the FTC

If you haven't heard of PewDiePie, don't worry ' he's a 26-year-old Swedish college dropout who likes to sit at his computer, play video games and shoot movie clips. But he also happens to operate the most popular YouTube channel in the world. He has nearly 50 million subscribers, and his commentary wields huge influence over the success of a video game release. Marketers pay him to exercise it. Last year, PewDiePie's production company reported an operating profit of about $8.1 million.

Brands have long valued “native advertising,” promotional content that is similar to the news, articles and entertainment that surrounds it. But they are increasingly spending their dollars on the particular subspecies known as influencer marketing, in which individuals ' ranging from stars (LeBron James) to quasi-stars (Kim Kardashian) to everyday people (a little-known blogger) ' endorse products with messages that are personal, direct and authentic. The dollars at stake are substantial. According to social media analyst Captiv8, the most popular influencers (three to seven million followers) command an average of $187,500 per YouTube post, $75,000 per Instagram or Snapchat post, and $30,000 per Twitter post. Even lesser influencers (between 50,000 and 500,000 followers) command average payouts of $2,500, $1,000 and $400, respectively.