The New York Times posed the following question on Twitter yesterday: “Brands pay people like Kim Kardashian thousands of dollars to praise products on social media. But is it an ad?”

The answer, of course, is yes. But it’s much more complicated than traditional advertising. Does Kim K. need to disclose that she’s getting paid? Is it enough to use #sp or #spon in the caption? What if she actually uses the hair strengthening gummy vitamins — does that make it less of an ad?

The legalities of influencer marketing are still very murky. Instagram influencer Conrad Benner, aka @StreetsDept, said it best when visiting Curalate’s HQ last week: “This is the Wild West, nobody really knows how it all works.”

The Federal Trade Commission apparently agrees, as it has “found itself struggling to articulate exactly how these sorts of paid brand endorsements should be handled to ensure that they are identified as ads,” according to the Times.

Technology always seems to be a step ahead of law, but watchdog groups are putting influencer marketing under the microscope. In fact, they claim that the presentation of influencer social media posts as testimonials (and not ads) is deceptive.

TruthinAdvertising.org says that influencers should be “putting ‘#ad’ or ‘#sponsored’ at the start of those kinds of social media posts, or providing verbal disclosures in videos,” the Times reported.

Although the Federal Trade Commission doesn’t have any hard-and-fast rules, TruthinAdvertising.org seems to be getting its way with the biggest family of influencers on the internet. After a lawyer for the Kardashian sisters received an Aug. 17 letter from the agency, the sisters “edited the captions on at least a dozen other Instagram photos and deleted others.”

Adding things like #ad or #sponsored are sure to lead to lower engagement, as well as nasty reactions from followers who don’t want to see ads in their Instagram feeds. That’s unfortunate for influencers, since there is serious money on the table.

Captiv8, a company that connects brands to influencers, says someone with three million to seven million followers can charge, on average, $187,500 for a post on YouTube, $75,000 for a post on Instagram or Snapchat and $30,000 for a post on Twitter,” the Times reported. “For influencers with 50,000 to 500,000 followers, the average is $2,500 for YouTube, $1,000 for Instagram or Snapchat and $400 for Twitter.”

Man, that’s a lot of cheddar. Will the brand/influencer relationship sour? I think it’ll lead to an influx of brands partnering with micro-influencers — people with approximately 10,000 to 100,000 followers on Instagram. They offer the best combination of engagement and broad reach — with like and comment rates that exceed influencers with higher followers. They will move the needle for your brand and cost a fraction of what you would pay a mega-celebrity. Plus, it’s much more authentic for a micro-influencer who specializes in men’s fashion, for example, to partner with a custom suit maker for a social campaign. More importantly, micro-influencers have small fanbases that are highly engaged and typically rooting for the influencer to succeed. That means they’re less likely to get angry when they see #ad pop up.

How will the Federal Trade Commission react to the rise of influencers? That’s anybody’s guess, but one thing is for sure — it’s on their radar.

Looking for ways to discover influencers who have an authentic voice? Check out Curalate Explore, which can help you find influencers to work with, form relationships with micro-influencers and find high-quality content piece-by-piece.