Social media influencers have become an increasingly popular way for companies to market their products, and this trend shows no signs of slowing down. In response to concerns about predatory marketing disguised as entertaining content, the Federal Trade Commission (FTC) has created regulations to protect consumers from undisclosed online advertising. The FTC has also released guidelines for social media influencers to follow when advertising products online. Influencers who promote products on their social media platforms or blogs must be aware of the FTC rules and regulations that govern the content of such posts.
The FTC defines an endorsement as any advertising message that consumers are likely to believe reflects the honest opinions or beliefs of the speaker, rather than those of a sponsor. This means that influencers are not exempt from the guidelines simply because they like the product they are promoting. Disclosures are required even if the influencer was not asked to mention a specific product, provided that the brand is compensating the influencer in some way.
It is the responsibility of the influencer to make these disclosures, not the company they are endorsing. Organic posts, where there is no material connection between the influencer and the brand, do not require disclosures.
A disclosure is necessary when there is a material connection between the influencer and the brand. A material connection is any connection that might affect the weight or credibility that consumers give the endorsements. This can include personal relationships, family relationships, employment or business relationships or financial relationships. A financial relationship includes compensation in the form of money payments, gift cards, or anything of value to promote the brand, including free or discounted products or services.
When influencers endorse a product through social media, the endorsement message should make it clear when they have a material connection with the brand. Influencers should disclose each time they post sponsored content, even if they think their followers are aware of their business relationship with the brand.
When posting from outside of the country, U.S. law still applies if the post is likely to affect or target U.S. consumers. However, foreign laws may also apply.
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, rather than in the “About me,” 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 in a group of hashtags or links as they are more likely to be missed by consumers. If the endorsement is in a picture or video, the disclosure should be superimposed over the picture or included in the content of the video.
Influencers need to use clear and simple language when making disclosures. Terms like “advertisement,” “ad,” and “sponsored” are likely sufficient, but vague language should be avoided. Terms like “sp,” “spon,” or “collab” are not adequate on their own. 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.
As the number of social media influencers who market products and services continues to increase, it is important that brand ambassadors comply with all guidelines. Consulting with experienced legal counsel can be a good first step to ensure compliance with these regulations. By following these guidelines, influencers can post sponsored content with confidence.