Brands, marketers, and influencers, take note: the FTC is inspecting social media posts for compliance with the duty to disclose “material connections”: any type of connection, usually financial in nature, that might affect the weight a consumer would give to a post if they knew about the connection between the “endorser” and the brand being endorsed.
Why would the @FTC bother to worry about “sponsored” social media posts? For the FTC, transparency in sponsored social media content is a matter of “truth in advertising”. It is considered misleading not to inform consumers about material connections between social media influencers and the brands they post about.
On September 20, 2017, the FTC hosted on its official Twitter page, @FTC, a Twitter chat on Influencer Marketing Compliance. Using the hashtag, #Influencers101, the FTC featured a live Q&A it called “Office Hours: Social Media Influencers 101”.
At the start of its chat, the FTC tweeted out a link to a press release from September 7, 2017 that announced the three important Influencer-Marketing enforcement actions from Commission:
- The filing and settling of the Commission’s “First-Ever Complaint Against Individual Social Media Influencers” for failing to comply with the FTC’s sponsored content guidelines (In this particular case, the influencers touted their own company in YouTube videos, but failed to disclose their ownership interest in their company – and they also paid other influencers to promote their company without disclosing their relationship.);
- The issuance of “warning letters” to 21 influencers and marketers from a group of more than 90 who had previously received “education letters” from the FTC informing them of their duty to make “clear and conspicuous” disclosure of sponsored content (The follow-up letters demanded information relationships and on corrective measures.);
- Updated its Endorsement Guides with more than 20 additional Q&A on how to disclose “material connections” in social media posts.
The Takeaways from the FTC’s #Influencers101 Twitter Chat
- Brands, marketers, and influencers each have independent duties to ensure disclosure of “material connections” or sponsored content in social media posts.
- Receiving a free product without a request for endorsement still requires a disclosure by the recipient if the recipient chooses to post about the product.
- “Don’t assume that disclosures built into [social] platforms are sufficient”.
- Current “built-in” YouTube, Facebook or Instagram disclosure tools don’t comply with the FTC’s standards of disclosure, tweeted the FTC.
- “#Ad” or “ad” may work as an adequate disclosure. The word or hashtag “ad” may be a sufficient disclosure of a sponsored brand relationship “as long as it’s easily noticed”.
- Hashtag “XXPartner” may also work as a disclosure “when XX is the brand name.”
- #Paid may also be adequate as a disclosure when it is easy to see.
- #Ambassador does not work as a disclosure. It is too “ambiguous”.
- Beware cluttered (inadequate) disclosures. Placing the disclosure “#ad” in a string of hashtags or links may not meet the required threshold of “clear and conspicuous” disclosure as the disclosure might “go unnoticed”.
- Be upfront with your disclosures. It is best to place the disclosure “in the beginning of a post” “whenever possible”.
- In Snap or Instagram (IG) Stories, disclosure can (and should) be made by superimposing an image with the required disclosure – it should be “easy to notice and read”.
- Every post in a series of “disappearing posts”, like on Snap or IG Stories, does not need to include a disclosure notation. Disclosure on the first post, tweeted the FTC, “could be good enough if it stands out and viewers have time to notice it.”
- On Pinterest, a proper disclosure could be made superimposed on an image or contained in the image description as long as it is “clear and conspicuous”.
- An image may be used as a disclosure rather than text “if it stands out, followers can’t avoid it, and they understand it.”
- Employee/employer relationships. A disclosure of your connection to a brand should be made if you work for a brand and are posting about your brand – even if you weren’t paid for a specific post.
- “’IF’…your followers know that you are paid to endorse a product…” then no disclosure is needed. The FTC’s commentary on this point continued into a second tweet: “but…If a significant portion of your followers don’t know” of your relationship to the brand or product, the relationship should be disclosed. What’s a “significant portion”? The FTC doesn’t say.
- Err on the side of disclosure. The FTC tweeted that determining whether followers are aware of a relationship between an influencer and a brand “could be tricky in many cases, so we recommend disclosure.” (The UK’s regulatory authority, the ASA, which follows a standard of disclosure similar to the FTC’s, sanctioned tweets by a well-known soccer player and a well-known brand, rejecting the argument that most of the player’s fans and followers would know of the athlete-brand relationship.)
- What about when influencers are posting from another country? Sorry, no break here: “US law applies when it’s reasonably foreseeable that posts will affect US consumers”, the FTC tweeted. It also cautioned that foreign law might apply as well.
- What about non-US influencers? “US law applies when it is reasonably foreseeable that posts will affect US consumers.” (If posting about products or services sold in the US, influencers from other countries should follow the FTC’s standards on disclosure.)
- What about influencer giveaways? Influencers should disclose when giveaways are sponsored by a third party.
- There is no FTC process for certifying compliance with disclosure requirements. The FTC did tweet that its staff is “happy to give informal guidance.”
- A “like” is an endorsement … and could get you in trouble. One tweet asked under what circumstances would disclosure be required when “liking” something. The FTC answered: “Our enforcement policy isn’t changing and we recognize some platforms don’t permit disclosure.” An abundance of caution might counsel against “liking” certain posts or accounts when there is a sponsored or “material” relationship and no mechanism for the required disclosure. – Or one might throw caution to wind considering it to be a trifling (de minimis) infraction. Perhaps echoing this last point, the FTC tweeted: “Before taking any action, we’d have to answer whether simple likes are material.”
- Brands should monitor and follow up with their influencers to ensure compliance with the FTC guidelines. “Dismissal” of an influencer by a brand may protect a brand from compliance complaints where an influencer fails to make the necessary disclosures.
- Affiliate links should be disclosed.
- The FTC is willing to answer additional questions about Influencer Marketing. Email: ENDORSEMENTS@FTC.gov
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Additional reading: FTC ‘s First Social Media Enforcement