Kim Kardashian was admonished by the Food and Drug Administration this week for promoting a morning sickness drug on Instagram. Ted Murphy, CEO of Izea, said the reality star needs to learn the reality of dealing with a regulated industry on social media. 'When you’ve got pharmaceuticals, alcohol, financial services or tobacco, those are things that are heavily regulated already with advertising,' said Murphy. 'There is this whole new dynamic with using influencers to promote those products where those people still have to abide by the rules and regulations set forth in other mediums such as television, radio and newspapers.' Murphy’s micro-cap company Izea operates a marketplace that connects brands with influencers, whether they reside on Instagram, Pinterest, Periscope Snapchat or elsewhere. He said choosing the right social media platform for product often depends on government regulations. 'For Twitter you are dealing with 140 characters so the disclosure is going to come in a different format,' said Murphy. 'For a regulated industry like pharmaceuticals that may not allow for enough disclosure to meet the guidelines that are out there.' He said one of the challenges with Instagram is that there are no links back to any Web site. Furthermore, Murphy said Instagram has a 'high decay rate', meaning that the photos fall off the stream very quickly. Murphy added that influencers need not be as widely followed as Kim Kardashian to make serious money flogging other people’s products. They simply need to create educational or entertaining content with which advertisers want to associate themselves.
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