FTC clarifies guidelines for how influencers must disclose endorsements

Last week, the Federal Trade Commission issued updated and clarified “endorsement guides” that govern so-called influencer advertising on social media.

When most people think of social media influencers, world-famous celebrities, athletes, and models might jump to mind. While such figures are highly sought out by certain global brands, much influencer advertising is done with smaller names — and smaller budgets. 

According to Hootsuite, “brands pay Instagram influencers [an average of] between $100 and $2,085 per post.” While the Kardashians of the world command much higher paydays, most influencers are taking in significantly less.

With so much brand-influenced and sponsored content on various social media platforms, the FTC wants to make sure everyday social media users can tell the difference between what’s a regular post and what’s a paid endorsement.

What the law says

The FTC seeks to make sure that ads are clear and not false or deceptive. According to its website, “if you endorse a product through social media, your endorsement message should make it obvious when you have a relationship ('material connection') with the brand.” 

"It’s important to remember that a material connection might not always be as clear cut as the brand giving you money for an endorsement. That compensation does not have to be monetary. If could be free tickets, discounted gear, swag, or other compensational products or services. What’s more, the material connection might not involve you directly. According to the FTC, it could include “a personal, family, or employment relationship.”  

So, exactly when do influencers need to disclose an endorsement? The FTC is patently interested in clarifying this question for the masses. The PDF it has produced is a slick seven-page document that is written in accessible language and adorned with social media imagery. This is a departure from actual legal-type verbiage that can read like a double dose of melatonin with a glass of warm milk. 

This comes directly from the federal government:

• Disclose when you have any financial, employment, personal, or family relationship with a brand.
• Financial relationships aren’t limited to money. Disclose the relationship if you got anything of value to mention a product.
• If a brand gives you free or discounted products or other perks and then you mention one of its products, make a disclosure even if you weren’t asked to mention that product.
• Don’t assume your followers already know about your brand relationships.
• Make disclosures even if you think your evaluations are unbiased.
• Keep in mind that tags, likes, pins, and similar ways of showing you like a brand or product are endorsements.
• If posting from abroad, U.S. law applies if it’s reasonably foreseeable that the post will affect U.S. consumers. Foreign laws might also apply.
• If you have no brand relationship and are just telling people about a product you bought and happen to like, you don’t need to declare that you don’t have a brand relationship.

It seems clear that the FTC is hoping to head-off any potentially confusing or misleading influenced content.  

What this means for marketers

With social media playing an ever-increasing role in how people discover and purchase products, influencers will continue playing a big role. Even so-called micro-influencers can have a big effect on spreading brand awareness and creating leads. 

However, marketers can find themselves in hot water if their influencer campaigns don’t follow the rules. Disclosures must be “hard to miss” and influencers must “superimpose the disclosure over the picture and make sure viewers have enough time to notice and read it” when on a platform like Snapchat or Instagram stories.

What becomes even trickier is situations with brand ambassadors and other fans of your company. If you are an all-star repeat customer and a brand offers you free tickets, do you need to disclose this gift when posting on social media?

While lawyers will certainly be needed to navigate some of the more complicated aspects of these regulations, it’s always better to be safe than sorry.

These new clarifications seek to help.

(image source: FTC.gov: https://www.ftc.gov/system/files/documents/plain-language/1001a-influencer-guide-508_1.pdf)