Reality TV or Karadshian fan or not, the Karashian women are incredible marketers, business owners and powerful influencers. If you're a blogger, hire bloggers, or otherwise follow influencer marketing, you need to follow them. Not from a fashion perspective, but from a business one. Since Kim Kardashian West, Khloé Kardashian, Kourtney Kardashian, Kendall Jenner and Kylie Jenner are such high profile influencers they are also under more scrutiny from the Federal Trade Commission (FTC) than others. There are lessons to learn from what they do and when they get in trouble.
For starters, each sister has a unique personality and they're all different ages. Follow the one you relate to best…for me that's Kim. Probably because I'm married and have kids too. No matter what you think of how they make money, you can argue that they are…
Business Lessons from the Kardashians
The Kardashian family has a lot of income streams. They've hawked other brands as well as created their own, including:
- Clothing lines
- Makeup lines
- Essential oils
- Weight loss products
- Mobile games and apps
- Tanning lotion
- Credit card
- Nail Polish
- Retail Stores: Dash and a store at the Mirage Las Vegas
- Shoes: ShoeDazzle.com
- TV shows
They've both been influencers and used their influence to sell products both on and offline. They're particularly savvy with using social media.
Influencer Marketing is a Form of Advertising
“For marketers contending with consumers who use ad blockers online and have cut the cord to their TVs in favor of streaming services, social media has become a way to reach an elusive audience.” – The New York Times
According to this article in The New York Times that is quoted above, TruthInAdvertising.org sent a letter to one of the sister's attorneys. The issue? Their lack of disclosure on social media posts. Suddenly posts were updated. So those $35 million dollar Airbnb villas in Turks and Caicos Kylie (19) hosted her birthday party at were actually free for her. I wonder if she's paying taxes on that value!
You Must Clearly Label Paid Promotions as Ads
The FTC expects influencers to clearly label paid product endorsements or gifts:
…guidelines from the F.T.C. that say it should be “clear and conspicuous” to consumers if a person endorsing a product “has been paid or given something of value.” However, while the agency suggests putting “#ad” or “#sponsored” at the start of those kinds of social media posts, or providing verbal disclosures in videos, there are no hard and fast rules. -New York Times
Evidently, though the sisters did go back and update their paid posts, they didn't go far enough. Truth in Advertising (TINA) recently filed a formal complaint against them with the FTC. Note that in that filing adding #spon at the end of a sponsored post wasn't enough. On August 25, 2016, the sisters got an overnight letter and email, stating in part:
Per TINA’s letter, which was signed by its Legal and Executive Directors and provided exclusively to TFL, while “21 of the 108 posts in TINA.org’s sampling were corrected to include #ad at the beginning of the caption; 6 of the 108 posts were edited to include an ad hashtag at the end of the caption; and 4 of the 108 posts were removed from publication,” as of August 25, 2016,” the vast majority of the posts in TINA.org’s database (75 out of 108) remain unchanged, while two were insufficiently edited by adding #spon at the end of the post captions.”
Sugar Bear Hair has tapped several models, including several of the sisters to promote their hair vitamins. It's actually a brilliant campaign to sell them at $84 a bottle. Imagine the ROI on that!
Here's the infamous Instagram post with Sugar Bear Hair (links to their Instagram page) that at first didn't disclose. Later it was updated with #sp and doesn't make it clear enough that this is a paid endorsement. The company has partnered with many high profile models – I noticed that most used #ad at the end of their post. One did at the beginning.
Here's another that hasn't complied at all:
The consequences for not complying include:
- Order them to immediately comply with the FTC Act
- Fine them for not disclosing
- Make them give up profits earned in connection with the postings that weren't disclosed or didn't disclose clearly enough
When you're getting $300,000 for an Instagram post, you are a big target.
Lesson for Influencers: Adding #spon at the end of a post on Instagram or Facebook may not be enough to comply with FTC requirements. Put #ad at the beginning or otherwise label sponsored content.
Kylie's $50 Million Airbnb Sponsored Birthday Gift
Kylie had a great birthday bash with her friends in some villas in Turks and Caicos. The problem is she didn't originally disclose that it was a gift.
The original caption of the image Kylie shared on Instagram didn't make it clear that the villas were given to her for her and her friends to use. I wonder what the requirements were for the gift. I'd love to see that contract!
The original caption read: “Thanks for the birthday home, @airbnb”
It was later updated to say:
“Thanks for the gift of a lovely birthday home, @airbnb.”
Lesson for influencers: Use the word gift in your posts, I actually like that better than #ad or #sponsored. I haven't tested but my guess is the word “gift” won't impact the response as much as saying it's an ad.
Create your Own Version of What's Trending Now
From Selfie to Belfie
While Kim Kardashian didn't invent the belfie (she probably says she did), she certainly took it to new levels. She claims she invented the word selfie but regardless of if it was her idea, she made famous the next iteration of selfies — taking photos of your own butt. In a great case of newsjacking, On.com which is a selfie social network, surveyed their network and learned that it's pretty tough to take a belfie. So they came up with a belfie stick to help. It got a ton of press and sold out. Lesson here: even if you're not a celeb or influencer, following them combined with polling your followers can give you some great ideas!
Kim came up with her own version of something else that was trendy – emojis. She created a unique branded name for them too – Kimojoi. She also created a game called The Kim Kardashian: Hollywood that according to a tweet from Kim herself has made $80 million (from when the game launched until March 2016). Maybe she can help fund Kayne's businesses with that (just a month before this tweet Kanye tweeted asking Mark Zuckerberg to give him $1 billion to fund his projects).
In this interview at BlogHer Kim says that her game was inspired by another game, called Stardom.
Lesson for influencers: Create your own version and branded name for something that's trendy that you can put your own spin on. Take an existing game or app and come out with your own branded version.
Kim Blogs 3x a Day and Charges for Her Content
While a lot of bloggers weren't happy to hear this news, Kim Kardashian was a keynote speaker this August at the mega women blogging conference BlogHer. The criticism was off though. If you think of her only as a reality TV star then you're right, bad choice. If you realize all that you can learn by watching her business savvy, then slam dunk.
In the interview Kim notes that she blogs 3x a day and respects bloggers – also that she's working on a TV show with beauty bloggers. Notice how she has a login for most blog posts. If you want to read all of it you're going to have to register. If you pay $2.99 a month you can get access to more content. That fact is plastered under each post. Yes, she has a pay wall. I didn't know that Kim blogged until I wrote this post.
Lesson for Influencers: If you have your own product or service, tout that on every post. Steve Pavlina always does this. Right now he has a stripe promoting his workshops but you can always tell what he's promoting no matter where you are on the site.
Contracts and Lawsuits
As an influencer you've got to protect your image and brand because people will try to steal parts of you to profit. You'll need to create and enforce contracts too. While we may not all have a team of attorneys on hand, there's a lot we can learn from how deals fail.
Kim, Kourtney and Khloe partnered with Haven Beauty in 2012 to launch a line of beauty products. Things fell apart over the years. The company said that the women didn't keep the terms of the contract because they stopped posting about the products on social media. The sisters sued when Haven came out with a new line called “Kardashian Beauty” and claimed they weren't being paid royalties.
Once they stopped paying royalties, the judge said, Haven no longer had rights to market using their names. The judge sided with the sisters, saying they “cannot both stop paying royalties but nevertheless continue using the trademark.”
If Haven felt the Kardashians had breached the contract…the company had two options: consider the contract terminated and stop performance, or continue making royalty payments and using the trademarks and then sue for damages. What the company did, however, isn't a viable option. – Hollywood Reporter
Lesson for Influencers: When someone hires you as a spokesperson then stops paying royalties (or commissions) as agreed to, they have no right to continue to use your brand to market their products. If they do, take action. Also, most contracts have parts that one or both sides fail to agree or execute – try to address this up front.
What other business lessons can influencers learn from the Kardashians?