Don’t be a shady marketer: FTC compliance Q&A for social media and influencer marketing.
As a marketer, I personally know the way we reach consumers has become increasingly sophisticated and, in some cases, very creative. It’s because digital marketers are challenged with changing algorithms and shrinking budgets to get their brand’s message in front of the right people. Couple this with demanding KPIs, you create the recipe for somewhat shady marketing and advertising practices. The struggle is real and FTC compliance for Social Media and Influencer Marketing, isn’t a joke!
Influencers have rescued many of us marketers from costly and diminishing returns on ad spend. And, with more and more marketers relying on influencers, their influencer-generated content and distribution, there have been of slew of posts that should be labeled as advertising. That’s an issue. The non-disclosure is a violation of FTC rules – the basis of the “truth-in-advertising” principal.
Not paying attention to influencer marketing compliance puts you in a lot of risk financially with the FTC, makes your content less authentic, and ultimately impacts your brand’s credibility. Only 1 in 10 marketers know sponsored posts should be tagged as ads. And only 56% of marketers were aware of the FTC’s policy and guidelines (eMarketer).
Ignorance certainly isn’t bliss and there are loads of nuances both marketers and influencers need to understand. So where do marketers acquaint themselves with the ins and outs? There’s the FTC but that sounds so formidable. We get it! To help, we hosted a webinar on this very topic “Know Thy Guidelines: FTC Compliance for Influencer Marketing in 2017.” We covered off on the nuances, and there were questions. Lot’s of questions. We have answers, but keep in mind this isn’t legal advice.
FTC Webinar Questions and Answers
Ad / Creative / Marketing / PR Agency & Client Questions:
Q: In what cases can an influencer agency get in trouble?
A: Influencers, agencies, and advertisers are all potentially liable (see examples in webinar).
Q: Can you explain disclosure when it comes to agencies promoting clients? For instance, is it ALWAYS necessary to use #client when posting anything about the brand on social media?
A: Agencies and employees of agencies or companies should also properly disclose their relationship with clients on social. The FTC elaborates on this to include employees posting on social and says “employees of an ad agency or public relations firm have a connection to the advertiser, which should be disclosed in all social media posts.” Source
Q: How should disclosures on social media be made when agency employees post about a client?
A: Employees of an agency or PR firm should disclose any connection to the advertiser when posting on social. For more guidance how to disclose, please review the FTC website, or contact legal counsel.
Platform-specific and use-case questions:
Q: How would you recommend disclosing a Pinterest sweepstakes?
A: All sweepstakes should be disclosed as #sweepstakes in social posts, before or close to the endorsement message. For more information, please see our FTC one-pager. (linked)
Q: How can you disclose with short vid formats such as Snap Chat where you may only have 10 seconds?
A: A verbal or visual disclosure in the post is sufficient. #ad or #sponsored are recommended. For more information, please see our FTC one-pager. (linked)
Q: What if you are hosting a Facebook Live video on your brand’s own Facebook page?
A: A brand hosting their own Facebook live video on their own channel isn’t sponsored content, so there is no need to disclose unless they were compensated to post for another brand.
Q: In regards to written disclosures, it is alright for the blogger to use the first sentence as a description of their post? i.e. “This is a tasty and easy pizza recipe that you can make in ten minutes. This post is sponsored by Pizza Co.” or does it need to come first i.e “This post is sponsored by Pizza Co…..”?
A: The disclosure needs to be clear and conspicuous. If it is before or near the endorsement message and not buried among other text or hashtags, it should be determined clear and conspicuous.
Q: Do brands/advertisers need to include #ad or #sponsored when reposting influencer content to their own channels?
A: No, as it is not sponsored content from the brand. The influencer content should, however, include that disclosure.
Q: What if a brand provides a vehicle for an influencer to use temporarily? The influencer doesn’t keep the vehicle, but has an experience with it and writes about it.
A: The influencer must still disclose they were given a car and the content is sponsored.
Q: Can you comment what are considered native ads? E.g. are video endorsements (YouTube videos) considered native ads? If so, is there a higher standard that applies in the case of native ads? E.g. Does the influencer need to include the words “AD” in the title of the video itself? In other words, does there need to be disclosure in the LINK ITSELF which bring the viewer to the video / native ad?
A: Here is the FTC’s guide for native advertising.
Q: You mention you need to actually have USED the product to endorse. Does this concept apply to affiliate marketing?
A: Per FTC Endorsement Guide: When the advertisement represents that the endorser uses the endorsed product, the endorser must have been a bona fide user of it at the time the endorsement was given.
Q: Per FTC What People Are Asking: Besides disclosing my relationship with the company whose product I’m endorsing, what are the essential things I need to know about endorsements?
A: The most important principle is that an endorsement has to represent the accurate experience and opinion of the endorser: 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.
Q: I am a podcaster. I pick my guests. What if I created a “pay to play” podcast that guests would pay to be on the show? If I say the “podcast is sponsored by XX”, is that enough?
A: Can’t opine on that. Requires FTC inquiry.
Q: Does an influencer have to be compensated? Is there an amount of money that matters. (i.e. more than a t-shirt)?
A: Any form of compensation from an advertiser – monetary, gifts, service, etc should be disclosed properly in posts.
International Disclosures:
Q: How do FTC guidelines apply to companies/agencies not located in the US (though active in that market by engaging with US influencers)?
A: Can’t opine on that. Requires FTC inquiry.
Q: Is there anything to be aware of regarding international content and FTC compliance? Example 1: content created by influencers in another country but viewed in the US (even though the US is not the intended market). Example 2: content created in the US that is meant solely for an audience in another country.
A: Can’t opine on that. Requires FTC inquiry.
“Who does this apply to questions” + general:
Q: How do you see FTC guidelines evolving in the future?
A: The FTC periodically updates their content and releases new information about their guidelines for disclosures. I think we can expect more crackdowns that make an example out of marketers, advertisers, influencers, and other parties who do not properly disclose. As online advertising evolves and new social networks pop up, the FTC will expand their regulation to include any new mediums or use-cases.
Q: Does this also apply to non-paid micro influencers? Say a brand has shared some exclusive content to it’s biggest fans and then one of the fans has shared that content. Then if the brand loves the post, they could surprise and delight the fan by sending them a gift – would this make them liable to the same rules as paid influencers?
A: Per FTC Endorsement Guide: When there exists a connection between the endorser and the seller of the advertised product that might materially affect the weight or credibility of the endorsement (i.e., the connection is not reasonably expected by the audience), such connection must be fully disclosed.
Per FTC What People Are Asking: What if all I get from a company is a $1-off coupon, an entry in a sweepstakes or a contest, or a product that is only worth a few dollars? Does that still have to be disclosed? The question you need to ask is whether knowing about that gift or incentive would affect the weight or credibility your readers give to your recommendation. If it could, then it should be disclosed. For example, being entered into a sweepstakes or a contest for a chance to win a thousand dollars in exchange for an endorsement could very well affect how people view that endorsement. Determining whether a small gift would affect the weight or credibility of an endorsement could be difficult. It’s always safer to disclose that information. Also, even if getting one free item that’s not very valuable doesn’t affect your credibility, continually getting free stuff from an advertiser or multiple advertisers could suggest you expect future benefits from positive reviews. If a blogger or other endorser has a relationship with a marketer or a network that sends freebies in the hope of positive reviews, it’s best to let readers know about the free stuff. Even an incentive with no financial value might affect the credibility of an endorsement and would need to be disclosed. The Guides give the example of a restaurant patron being offered the opportunity to appear in television advertising before giving his opinion about a product. Because the chance to appear in a TV ad could sway what someone says, that incentive should be disclosed.
Q: How do you handle influencers who do not abide by rules or disclosures, even when prompted by the brand and followed up after a post going live, if disclosure isn’t included? When is a brand not as liable based on continued follow-up in writing?
A: Influencers, agencies, and advertisers are all potentially liable (see examples in webinar).
Q: As an advertising agency if we provide a product to a social media influencer and they do not disclose that who is liable?
A: Influencers, agencies, and advertisers are all potentially liable (see examples in webinar).
Q: Is there a difference between guidelines and the manner they apply to influencers vs. traditional celebrities?
A: Per FTC “What People are Asking”: A famous athlete has thousands of followers on Twitter and is well-known as a spokesperson for a particular product. Does he have to disclose that he’s being paid every time he tweets about the product?It depends on whether his followers understand that he’s being paid to endorse that product. If they know he’s a paid endorser, no disclosure is needed. But if a significant portion of his followers who don’t know that, the relationship should be disclosed. Determining whether followers are aware of a relationship could be tricky in many cases, so we recommend disclosure. A famous celebrity has millions of followers on Twitter. Many people know that she regularly charges advertisers to mention their products in her tweets. Does she have to disclose when she’s being paid to tweet about products? It depends on whether her followers understand that her tweets about products are paid endorsements. If a significant portion of her followers that don’t know that, disclosures are needed. Again, determining that could be tricky, so we recommend disclosure.
Q: What is the responsibility of the sponsoring company to make sure that its influencers use such wording in blogs, posts?
A: Influencers, agencies, and advertisers are all potentially liable (see examples in webinar).
Q: I represent a company that wants to start using influencers for contests and giveaways. Can we be held responsible if our influencers are not compliant?
A: Influencers, agencies, and advertisers are all potentially liable (see examples in webinar).
Still have specific questions about FTC compliance? Make sure you register for our encore live webinar. Click the image below to RSVP.
Authored by:
Joseph Cole, VP of Marketing, TapInfluence. Follow: @joefcole