Now tell the truth,
would you buy a product or attend an event
just because a celebrity told you to?
Social media influencers and models,
Kendall Jenner and Bella Hadid are under fire
for promoting the defunct Fyre Festival on social media
and not disclosing they were paid to do so.
The entire festival debacle is documented
on Netflix's new documentary,
Fyre: The Greatest Party That Never Happened.
All these models like,
in the Bahamas.
The most insane festival the world
has ever seen.
Island getaway turned disaster.
It became very barbaric.
Right now, you are the (bleep)
laughingstock of everything.
Just wait until you see
what you're getting yourselves into.
American rapper Ja Rule lives in the Bahamas
with his business partner.
Billy McFarland.
Is an amazing entrepreneur.
He could convince anyone
of pretty much anything.
So Areva, tell us what happened
to the creator of the event.
Wow, this whole festival was one big hot mess.
Literally.
And this 26-year-old, you know, quote-unquote investor
hooks up with Ja Rule, and he's charged
with defrauding investors out of over 26 million dollars
for this festival, as we heard.
26 million?
26 million dollars.
Sold out in like two days.
Tickets were selling anywhere from 1500
up to like 27, 28 thousand dollars.
People were promised gourmet meals, you know.
What happened to that money?
VIP accommodations.
Well, they're saying he stole the money.
And when they got to this island,
which was not Pablo Escobar's private island in Bahamas,
that they were like in these rat-infested tents,
and they were eating food from Costco's.
Cheese sandwiches, bologna sandwiches.
Anything other than this, you know,
VIP experience that they were supposed to have.
This guy now, Billy McFarland,
in federal prison serving six years for fraud
because of what he did.
Now what about like the Kendall Jenner and
Bella Hadid, you know?
These are people, you know..
They approach us all the time as celebrities.
Hey, we'll pay you to post.
That says what we were saying before.
You've gotta know what's good for your brand,
and what's not good for your brand.
You've done some brand endorsement,
and I do as well too.
I have my own hair collection.
But you've got to know when something just..
When it's okay to say no.
We should talk about the federal trade commission,
because that is the entity
that regulates this whole endorsement.
Absolutely.
Business, and so many times
people will see an endorsement,
on a social media page from an influencer
or a celebrity and think oh my God,
if Rosie loves this product it must be great.
But the celebrity has not revealed
or disclosed they're being paid for that endorsement.
So the FTC has come down really hard
on influencers and celebrities.
And now you have to indicate on that that endorsement,
you have to say very clearly paid endorsement.
You know what but somebody should look for that.
Out of the clear blue, I noticed that.
I mean it's a little small print,
that's right above like the Instagram post that you see.
This is a paid endorsement.
And I'm so glad that they're doing that.
Because you have to understand the power of celebrity.
This is the biggest marketing trick ever.
Because celebrities influence us,
through what we call the peripheral route of persuasion.
It just means that because we like the,
we're going to like everything that they buy.
Sometimes when we buy something
that the celebrities are using,
we think that we're close to them.
Like we have a relationship with them.
Especially when it's a more intimate product,
like Vivica's hair collection.
People are like,
oh well I'm just like Vivica.
It boosts their self-esteem.
So it's too easy for us to fall for that,
if we don't know they are truly paid for.
That maybe they don't sometimes use it in their real lives.
And they may not be value driven like you,
and they may not really believe in that product.
They're only doing it because they're getting..
They're getting paid to say they love a product.
But Areva one thing that I love that you mention,
it's so so important that when an influencer's
getting paid for a product to promote,
if you really want to know.
They have to,
by lay they have to put either hashtag ad,
hashtag brand ambassador, or hashtag partnership.
And then now the hashtag paid endorsement.
And you know that if they're really pushing the product,
if they're getting paid for it.
Some of them will also put hashtag this is not an ad.
And they're letting you know that way,
that they believe in the product.
So those are things that you could do as a consumer,
to pay attention to what's real and what isn't.
Absolutely, so consumer pay attention.