Social Media Influencer Advertising - Romano Law

Social Media Influencer Advertising

Social Media Influencer Advertising

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Updated: May 17, 2022

In recent years,  companies have been using social media influencers to market their products  and the practice is certainly not going away.  In response to the growing trend, the Federal Trade Commission (FTC) recognized the need to shield consumers from falling for predatory marketing disguised as entertaining content.  The FTC created regulation to protect consumers from undisclosed online advertising and released a publication for social media influencers, to provide some basic rules and guidelines for advertising online.

Influencers who promote products on their social media pages or blogs need to be aware of the FTC rules and regulations that govern the content of such posts.  The disclosure requirements which influencers must follow when “endorsing” a product are set forth in the commission’s “Disclosures 101 for Social Media influencers” and related Endorsement Guides.

What Is Considered An “Endorsement” under the FTC Guidelines? 

An endorsement is any advertising message that consumers are likely to believe reflects the honest opinions or beliefs of the speaker, as opposed to those of a sponsor.  The rules apply even if the views expressed by the influencer reflect the message being set forth.  Therefore, endorsers are not exempt from the guidelines just because they like the product they are promoting.  Disclosures are required even if the influencer was not asked to mention a specific product, provided the brand is compensating the influencer in some way.

It is the responsibility of the influencer to make these disclosures, not the company the influencer is endorsing.  Organic posts, where there is no material connection (as described more below) between the influencer and the brand, do not need disclosures.

When is A Disclosure Necessary? 

Disclosure is required when there is a “material connection” between the influencer and brand.  A material connection is any connection that might affect the weight or credibility that consumers give the endorsements. A material connection can include a personal relationship, family relationship, employment or business relationship, or a “financial relationship.”  A “financial relationship” includes, but is not limited to, money payments or gift cards.  Financial relationships can also include scenarios where the influencer receives anything of value to promote the brand, including compensation in the form of free or discounted products or services.

If influencers endorse a product through social media, the endorsement message should make it obvious when they have a relationship (“material connection”) with the brand.  Influencers should disclose each time they post sponsored content, even if they think that their followers are aware of their business relationship with the brand.

When posting from outside of the country, U.S. law will still apply if it the post is likely to affect or target U.S. consumers.  However, foreign laws may also apply.

If there is no brand relationship and the influencer is just telling people about the product they like, they do not need to declare that there is no brand relationship.

How Do I Disclose? 

The best practice for disclosure of a material relationship with a brand is to place the disclosure where it is hard to miss.  Consumers should be able to see and understand the disclosure.  The disclosure should be placed with the endorsement message itself.  This means that it is not enough to put the disclosure only in the “About me” or profile page, at the end of posts or videos or anywhere that requires the viewer to click to see additional content.  Disclosures should not be hidden into a group of hashtags or links as they are more likely to be missed by consumers.  Lists are fine, but the disclosures should be clearly visible and differentiated in the list in some way.

If the endorsement is in a picture on a platform like Instagram or TikTok, the disclosure should be superimposed over the picture making sure the viewer has enough time to notice and read the disclosure.  If making an endorsement in a video, the disclosure should be in the content of the video and not just in the description associated with the post.  Influencers creating video content should both audibly say the disclosure and superimpose the disclosure in the video.  If making an endorsement via a live stream the disclosure should be done periodically throughout the stream so that a viewer is more likely to hear it if they only watch part of the stream.

Influencers need to use clear and simple language; explanations like “Thanks to [COMPANY OR BRAND NAME] for the free product” are often adequate, if placed in a way that is hard for a consumer to miss.  Terms like “advertisement”, “ad” and “sponsored” are also likely sufficient.  Vague language should not be used.  According to the FTC, examples that are not adequate include: “sp,” “spon” or “collab,” or stand-alone terms like “thanks” or “partner” or “ambassador.”  A platform’s disclosure tool may not be enough to satisfy the FTC’s requirements but may be used in addition to the influencer’s own disclosure.

Conclusion 

As the global market continues to develop, the number of social media influencers that market products and services will likely increase exponentially.  Whether product endorsements are a side-hustle or a primary source of revenue, brand ambassadors should be sure they comply with all guidelines.  Consulting with experienced legal counsel who can walk you through this complex maze can be a good first step to ensure you can post that selfie with confidence.

Photo by Jon Tyson on Unsplash

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This Blog is made available by Romano Law PLLC for general informational and educational purposes only, not to provide specific legal advice. By using this Blog you understand that there is no attorney client relationship between you and Romano Law PLLC or any individual contributor. You should consult a licensed professional attorney for individual advice regarding your own situation.

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