Five Things You May Not Know About FTC Guidelines for Influencer Marketing
If your brand does not require your network of influencers to disclose their sponsored content, you may face legal repercussions.
Do you know that the FTC, or Federal Trade Commission, has been cracking down on brands and influencers who do not properly disclose their relationships? In fact, the FTC recently sent letters to over 90 influencers firmly reminding them that they must disclose their relationships with brands.
Both brands and influencers can get into serious legal trouble if they do not disclose their partnerships, yet 93% of sponsored posts are still not FTC complaint. The lack of disclosure in the majority of sponsored posts may not be due to defiance or negligence, though. The fact is, many brands and influencers are not aware of the FTC guidelines or how to properly disclose sponsored content.
Contrary to what you may have read in the past, throwing “#sp” at the end of an Instagram caption is no longer enough to comply with the FTC’s endorsement guidelines. Earlier this year the FTC updated their Endorsement Guidelines, further explaining how sponsorships and relationships between brands and advertisers should be “clearly and conspicuously disclosed.” It is important for you to know and relay any FTC guidelines to your network of influencers.
Here are five things you may not know about the FTC’s endorsement guidelines that will to keep your brand, and the influencers you work with, out of trouble.
1. Monetary compensation is not the only partnership that must be disclosed
The FTC’s Endorsement Guide states that an influencer must disclose if there is a “material connection between an endorser and the marketer of a product.” Material connections are not only limited to monetary compensation and include any business or family relationships with a brand, free products, or any form of gifts, perks or benefits.
For example, if you send an influencer a free product with no obligation to promote it, they are still required to disclose that they were sent the product for free if they decide to promote it on their social channels. Or, if you invite an influencer to a brand event and give them a free product for attending, the influencer is also required to state that they received the product from the brand.
When explaining the reasoning behind this to influencers, the FTC stated:
“Even if you don’t think it affects your evaluation of the product, what matters is whether knowing that you got the [product] for free might affect how your audience views what you say about the [product]. It doesn’t matter that you aren’t required to review every [product] you receive. Your viewers may assess your review differently if they knew you got the [product] for free, so we advise disclosing that fact.”
2. You can’t rely on built-in tools for sponsorship disclosures
While social media platforms’ built-in disclosure tools are meant to be clear and hard to miss, the FTC says that they are not enough to comply with endorsement guidelines and that influencers should still disclose their relationship with the brand in their caption.
Instagram recently began testing a new way for celebrities and influencers to identify their sponsored posts. Similar to YouTube and Facebook’s paid promotion notifications and tools, Instagram’s paid partnership feature clearly notifies viewers when a post is sponsored at the top of the image.
Instagram’s paid promotion feature must be activated on the brand side. However, it is not yet available to all influencers; right now it is being rolled out to larger accounts. If your brand does decide to activate this feature, make sure you still remind your influencers to disclose your partnership clearly in their caption.
3. The FTC doesn’t monitor bloggers—that’s your job as the brand
Require that the influencers you partner with disclose sponsored content and comply with FTC guidelines. Not only does honesty and transparency preserve both your brand and the influencer’s trustworthiness, it will help you to avoid potential lawsuits in the future.
When asked if they monitor bloggers, the FTC responded
“Generally not, but if concerns about possible violations of the FTC Act come to our attention, we evaluate them case by case. If law enforcement becomes necessary, our focus usually will be on advertisers or their ad agencies and public relations firms. Action against an individual endorser, however, might be appropriate in certain circumstances, such as if the endorser has continued to fail to make required disclosures despite warnings.”
Remember, the FTC requires disclosure for any form of compensation. This means that if you are seeding products or working with influencers in any capacity (even if money is not exchanged) and they are failing to clearly disclose your partnership, both parties can face serious legal trouble if a complaint is submitted to the FTC.
With the increase in influencer marketing over the past year, consumers are now able to spot sponsored content from a mile away. Therefore, it is best to be honest and transparent about any relationship between a brand and an influencer. Do not attempt to mislead consumers or you may risk losing followers and support.
4. You can use disclosures to your advantage
Using a unique branded hashtag to disclose your influencer partnerships is a great way to get your content found, promote your brand’s exposure and reach, and improve SEO. Typically, influencers disclose sponsored content by including #ad or #sponsored in their caption. As long as a partnership is obviously disclosed, these traditional hashtags are not the only way to comply with the FTC rules.
Some brands have begun to try something a little more creative. For example, Airbnb requires their network of influencer partners to include #Airbnb_partner in the first line of their Instagram captions. Not only does this comply with the FTC guidelines, it also encourages an online community between the brand, influencers and their audience.
The FTC has confirmed that creating a branded hashtag with the word “partner” is in fact a proper way to disclose a partnership.
5. Sponsored post disclosures don’t hurt engagement
Many brands and influencers may avoid disclosing sponsored posts in fear of coming off as inauthentic and losing engagement with their audience. However, there is no correlation between identifying sponsored posts and a decrease in engagement. In fact, disclosed posts actually improve engagement. This is because consumers can tell when posts are sponsored even if it is not clearly stated. Typically, undisclosed posts are usually full of comments from fans calling influencers out for their dishonesty, which can shed a negative light on the individual influencer as well as on your brand.
If the sponsored content is high quality and authentic, you will not see a decrease in engagement. Consumers go to trustworthy influencers for honest reviews because they are tastemakers in their space. So, when an influencer discloses their relationship with the brand it is seen as a sign of honesty and therefore the content receives a more positive response than undisclosed content.