Whether you’re an advertiser, blogger, influencer or ad agency, if you take part in social media or influencer marketing, you know that it can be a little confusing to understand some of the rules, especially when it comes to the finer points of disclosure. Luckily, the Federal Trade Commission (FTC) has created Endorsement Guides that answer questions advertisers and influencers might have about the requirements for disclosing what the FTC calls material connections.
Material connections are relationships between advertisers and endorsers (such as influencers) that might involve payment, or family or business ties. Consumer protection is the FTC’s job, and when material connections exist, the FTC guidelines say that advertisers must disclose them. That way advertisers don’t mislead consumers into thinking, for instance, that positive reviews of their products on social media are objective and independent, when if fact, the advertisers have paid influencers to post the positive content.
Another key point in the FTC Endorsement Guides has to do with proving an endorser’s claims about an advertiser’s product. If the endorser claims results from using a product that are far better than what the average consumer would achieve, then the ad has to be straightforward about the results that most people actually get.
The FTC guidelines cover a lot of ground. Here are answers to some of the most common questions about social media and influencer marketing featured in the guide:
Endorsements on Social Media
With several recent high-profile cases involving well-known companies including Lord & Taylor and Warner Bros., the FTC has made a strong point about the need for influencers to clearly and conspicuously disclose when they receive payment or free product from advertisers.
However, one area of FTC focus that hasn’t received quite as much attention is the practice of buying likes or bogus followers for social media. Although there is a big influencer market for fake likes and bogus followers, the FTC warns that buying them is a deceptive practice. Both the buyer and the seller of fake likes or non-existent followers could end up in hot legal water with the FTC, so it’s best to stay honest.
Paid expert endorsers or celebrity spokespeople should disclose their relationship with a company when endorsing its products in formats that don’t look like advertising. For example, if they’re appearing on a news or talk show, it might not be immediately apparent to viewers that it’s a promotional appearance.
If an employee of a company identifies their employer on their personal Facebook page, then goes on to post about the company’s products there, it’s a good idea to include a disclosure.
Another important thing that endorsers should know is that if they haven’t tried a product, they can’t say they did. And if they received payment to try a product and thought it was awful, they can’t lie and say it was wonderful.
The Details About Disclosures
The bottom line with disclosures of material connections is that they should be clear and conspicuous, that is, not difficult to understand, find or read. Disclosures can be as simple as, “Company Z gave me this product to try,” or “Company Z paid me to try this product.” The influencer should post a disclosure for each product they receive for free and review or are paid to review.
Disclosure rules apply not only to big brands, but also to small businesses. For example, if you own a local restaurant, and you pay influencers or give them free meals to post positive reviews about your eatery on social media, they have to disclose that you did so.
When it comes to video, disclosures should be placed at the beginning of the video, be easy to read and stay on the screen long enough to be read. For videos that run longer, for instance video game playthroughs with running commentary that run for several hours, it’s a good idea to include disclosures at different points during the video. Another option is to have a continuous disclosure that’s always displayed. Audio disclosures should use language that’s easy to understand and should be spoken at a pace that’s easy to follow.
Social Media Contests and Online Review Programs
When it comes to social media contests, the FTC advises marketers to use the word sweepstakes or contest as part of the hashtag that participants have to use in a positive tweet or pin about the company to enter the contest. That way, it’s clear to consumers that there was an incentive to post—the chance to win something.
An Advertiser’s Responsibilities
The FTC guidelines are clear: The buck stops with the advertiser when it comes to the disclosure of endorsements. The advertiser is responsible for ensuring that any agencies or influencers they work with on social media marketing campaigns know and correctly practice the rules of disclosure.
It’s also the advertiser’s responsibility to explain to influencers and bloggers that deceptive practices, especially when it comes to health-related products, can cause harm to both consumers and the advertiser. The advertiser should tell those who endorse its products what they can and can’t say. A false claim about a product could cause injury or financial loss.
The FTC guidelines also suggest that advertisers monitor the other parties they work with to check compliance.
Intermediaries, Affiliates and Network Marketing
A marketer who advertisers pay to distribute products to members of the marketer’s network asks how disclosure affects participants in the network if they endorse the products.
The answer is that the marketer should tell the members that they should disclose any free products they receive. The marketer should also instruct the advertisers to remind the members of the need to disclose any free products they post about that they get from the advertisers.
An affiliate marketer who posts recommendations of companies’ products that include links to those retailers and then earns a commission from any sales they bring asks what is considered an adequate disclosure of such a relationship.
The FTC responds that viewers should be able to see the link and the disclosure at the same time, so they shouldn’t be separated. The affiliate also shouldn’t hide the disclosure on another page or behind a link so that consumers have to look for it. It should be clear, conspicuous and close to the affiliate’s recommendation.
