Will Instagram's new Stories feature encourage product placement?

The feature is intended to encourage users to post more candid images. But a growing number of posts hawking products could limit that push for authenticity.

Instagram’s Stories feature, which lets users post rapid, possibly less curated moments from their lives in a slideshow that disappears within 24 hours, quickly drew comparisons to Snapchat’s Stories when it was released on Tuesday.

But some say the feature could also further a concern that’s become commonplace on the photo sharing site: users displaying products in their photos without disclosing that they’re also being paid to hawk those products online.

Failing to disclose that a post is instead a subtle (or not so subtle) ad is illegal, prohibited by the Federal Trade Commission and Britain’s Advertising Standards Authority. But with sites like Instagram getting new posts on a constant basis, tracking and reporting them is often a herculean task, Jay McGregor notes for Forbes.

“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,” say FTC guidelines, updated last year to include social media sites. “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.”

Mr. McGregor, who identified 110 Instagram photos that appeared to be ads but aren’t labeled from one company alone – Protein World, a diet supplement company – says Instagram Stories could add to that trend.

That would be an ironic twist, as Instagram says it introduced the Stories feature in a bid to encourage users to share more candid images, rather than the sometimes heavily retouched, permanent photos that many users share on the site.

“Our mission has always been to capture and share the world’s moments, not just the world’s most beautiful moments,” Kevin Systrom, the app's co-founder and chief executive, told The New York Times. “Stories will alleviate a ton of the pressure people have to post their absolute best stuff.”

But so-called “native advertising,” where celebrities and other popular figures share photos of themselves using products in a way that’s intended to less overtly signal that it’s an ad, have become a lucrative market on Instagram and video sharing sites like YouTube.

Some users, including many reality TV stars, can earn thousands of dollars for a single post sharing a product with their followers. 

Ross Dickerson, a fitness entrepreneur who considers his Instagram to be a business, told Forbes he can earn £500 a day – about $665 US – from sharing images of products and hawking his own fitness plans to his 1.3 million followers.

But he’s also reluctant to endorse certain products.

“I’ve been offered silly money to post things on my Instagram like teeth whiteners,” he told the site. “But I always say no. I could be making an extra 5 grand a month, but I’d look like a sellout.”

Snapchat, which Instagram's Mr. Systrom acknowledged as an influence on his site's new Stories feature, introduced a native advertising feature last fall. Called Sponsored Lens, it works by letting people add an animated, branded filter to the pictures they send using Snapchat, AdAge reports.

The new feature marked somewhat of a new realm for Snapchat, which previously introduced a product allowing brands to include ads within a user’s recent updates feed, but not in an actual “snap” sent from one user to another.

“We are different than other traditional social networks,” Emily White, the company’s chief operating officer, told The Wall Street Journal in 2014. With the rise of native advertising, she said, “It’s getting really confusing to users. They don’t like to be tricked.”

While users are increasingly turning to ad blockers to hide messages online, illegal native ads could present a further challenge, McGregor noted for Forbes. 

Regulators like the FTC, he says, rely on the public to report images that appear to be ads hiding in plain sight on social media. With the growing number of native ads, the sites could come to look much different than their creators may have originally intended.

“It could change the very nature of the content produced as people think about each post through the prism of ‘will this catch a sponsor’s eye?’ Which, ultimately, will destroy what makes Instagram, YouTube and others so special: their authenticity,” he writes.