Understanding FTC guidelines for influencer marketing

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The FTC is cracking down on brands that aren’t following the rules and regulations for influencer marketing. Where they are and aren’t enforcing these rules, though, has left many confused.

To help with your influencer marketing planning, we’ve outlined what you need to do in order to keep your brand compliant with the FTC Guidelines.

Include disclosures

The important point is for the influencer to get the message across to his/her audience that the brand is compensating him/her for the post. Surprisingly, there is no single correct way to do this.

In the FTC guide, the organization outlines these two options for statements as a way of properly alerting audiences that the brand provided products for the influencer to post about:

“Company XX gave me this product to try . . .”

“Some of the products I’m going to use in this video were sent to me by XX’s manufacturers.”

The FTC’s guidance is to make the audience aware of the nature of the influencer’s relationship with the brand. If you’re providing both product and additional compensation, then the likelihood is increased that the influencer will give a favorable review.

The addition of compensation beyond product trial could bring into question the validity of the review. This makes disclosure especially important.

The only two hashtag versions that seem to fully cover your bases are #ad and #sponsored— these are the briefest ways to declare that an influencer is receiving financial compensation, as well as products, for a post.

Make disclosures clear & conspicuous

The basic question you should ask yourself when evaluating a caption for a sponsored post is, “Could anyone mistake this for a non-sponsored, organic post?” If the answer is “yes,” then the disclosure is not sufficient.

The FTC requires that disclosures be “clear and conspicuous.” Clear, meaning you can’t mistake it for an organic ad. Conspicuous, meaning you can’t miss it.

US Federal Trade Commission FTC Washington DC

When you’re giving creative direction to your influencers, make sure that they understand the basic rules and give them some examples of disclosure statements that they can use in their posts.

Thinking that your influencers can bury their disclosure tag in a second comment amongst a bunch of other tags? Think again. The FTC guidelines clearly discourage that: “Preferably, design advertisements so that ‘scrolling’ is not necessary in order to find a disclosure. When scrolling is necessary, use text or visual cues to encourage consumers to scroll to view the disclosure.”

In short, these are the FTC’s criteria for gauging whether your disclosure message meets their standards:

  • Close to the claims to which they relate;
  • In a font that is easy to read;
  • In a shade that stands out against the background;
  • For video ads, on the screen long enough to be noticed, read, and understood;
  • For audio disclosures, read at a cadence that is easy for consumers to follow and in words consumers will understand.

Make the posts honest

Brands cannot make false claims about their products in any kind of advertising. This rule applies to influencer content, as well. If the tea can’t really help you detox, or the strips can’t really whiten your teeth, you’re not allowed to purport that they can.

Furthermore, disclosures do not absolve false claims: “A disclosure can only qualify or limit a claim to avoid a misleading impression. It cannot cure a false claim.”

If you are identifying influencers who are smart lifestyle matches and who believe in your products, you’re off to a good start. Most content creators will not partner with brands whose products they would never actually consume.

If influencers believe in the product they are endorsing, their content will be much more meaningful to both the audiences and the brands. In addition, you can be comfortable that the claims they’re making (if any) are truthful.

The FTC provides these three guidelines for avoiding false claims:

  • You can’t talk about your experience with a product if you haven’t tried it.
  • If you were paid to try a product and you thought it was terrible, you can’t say it’s terrific.
  • You can’t make claims about a product that would require proof the advertiser doesn’t have.

Understand the consequences

So what if an influencer doesn’t disclose their involvement with your brand? What could happen?

The FTC has been cracking down on companies and influencer marketing agencies that do not have disclosures included in the posts made on their behalf.

Two recent examples:

Lord & Taylor’s now-famous blogger campaign that featured 50 women endorsing one dress without disclosure of their sponsored relationship. The campaign was outrageously successful, with the dress quickly selling out.

This success may have caught the attention of the FTC, which led a complaint against the brand. The FTC will be babysitting Lord & Taylor’s marketing efforts from here on out to make sure that they don’t violate the rules again.

Warner Bros paid people to promote a new video game without properly disclosing their affiliation with the brand. The brand directed influencers to “place sponsorship information in the text of the description box – that’s the collapsed box just below a YouTube video – not in the video itself.”

shadow-of-mordor

The FTC caught wind of this and the brand was reprimanded. The settlement included steps to ensure that the brand is “educating influencers regarding sponsorship disclosures, monitoring sponsored influencer videos for compliance, and, under certain circumstances, terminating or withholding payment from influencers or ad agencies for non-compliance.”

These brands will have the FTC looking over their shoulder at every turn for future violations. But what could happen to the individual content creator involved with a deceptive program?

In the case of the Warner Bros settlement, it is clear that the FTC could require that a brand or agency withhold your payment. Queen of the internet, Kim Kardashian, was reprimanded by the FTC for a post she made to promote a morning-sickness pill during her pregnancy.

Kardashian stated in her caption that she was “excited and happy to partner” with the brand. The FTC did not deem this a clear enough statement about her financial relationship with the brand.

Advertising Attorney Linda Goldstein, with the law firm Manatt, Phelps & Phillips, speculates that the FTC could pursue legal action against Kardashian for misrepresenting the drug in an ad.

As of the writing date, we are not aware of any legal action taken against individual influencers. The FTC has an ad nauseum list of actions it can take in legal response to rule breakers, including adjudication and litigation.

Influencer marketing is still pretty new and some brands are just trying it for the first time. You may find yourself in the position to help your clients understand the FTC guidelines.

This is a great example of taking a partnership role with a brand to a more valuable level. Arm yourself with knowledge to protect yourself and your clients.

Get yourself educated so you can educate your influencers

Educating your influencers comes from having an understanding of these dos and don’ts yourself. The FTC has published a plethora of resources to help you understand the in’s and out’s of their rules and regulations (listed below). But all of this information can be fairly cumbersome to digest.

To simplify the information you need to know, there are some comprehensive guidelines available for brands that outline what you can and can’t do with your influencer marketing.

We recommend these handy guides for your campaign planning:

Influencer marketing is a smart way to create authentic engagement with your community. But only when it’s done right and in accordance with the law. With this information at your disposal, you’ll be able to safely activate influencers for your next marketing program.

Brian Zuercher is the CEO & Founder of SEEN and a contributor to SEW.

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