FTC Guidelines for Influencers in 2023

Brands and influencers are working more closely than ever before. Influencer marketing is a $6 billion industry, according to Insider Intelligence. While these relationships are mutually beneficial, FTC guidelines for influencers apply to social endorsements. The FTC has recently provided updated guidance for brands and creators.

Before we get into the 2023 updates, let’s break down the basics. The FTC works to limit deceptive advertising. As a result, the FTC requires influencers to announce their relationship with a brand publicly. Failure to do so is a big deal. Kim Kardashian, for example, was fined $1.26 million for not telling her Instagram followers that she was paid to represent a cryptocurrency, EMAX tokens.

FTC influencer guidelines and disclosure rules can be a bit confusing. To help, here’s when, how, and where to disclose your relationships with brands, along with some additional tips and advice.

FTC guidelines for influencers

Under what circumstances does an influencer have to disclose his or her relationship with a brand? If you have any financial, personal, employment or family relationship with a brand, you have to tell followers about that connection, according to the FTC’s Disclosures 101 for Social Media Influencers.

If a brand does any of the following, you must disclose your relationship:

Gives you a free product.
Pays you to endorse a product.
Gives you anything of value or perks like an event invitation or early access to sales.

How and where to disclose

The FTC says you need to disclose your relationship in a way that’s “hard to miss.” Here are some dos and don’ts according to the FTC social media guidelines:

Do:

Use words that are easy to understand.
Use terms like ad, advertisement, brand sponsor, and brand ambassador.
Place the disclosure in a prominent place in the endorsement post.

Don’t:

Mix your disclosure into hashtags at the end of a post.
Disclose the relationship on a website or a page that you link to.
Assume that your followers know your relationship with a brand, even if you’ve worked with them before.
Use vague terms like sp, spon, collab, or thanks.
Assume that a platform’s disclosure tool is good enough. Use it in addition to these disclosure rules.

FTC disclosure example

The FTC says you can say something like, “Thanks to ABC Company for the free product,” or place the words ad, advertisement, brand sponsor, or brand ambassador front and center.

Take a look at the example below. The first word of the post is #ad. It’s clear, prominent, and easy to understand that this influencer has a relationship with the brand.

View this post on Instagram

A post shared by Aylsa🍊HOPPS HOUSE (@hoppshouse)

Rules that apply to different types of posts

The tips above are helpful if an influencer creates a static post, like an image, for a brand, but there are other formats. Here’s a look at a few other FTC guidelines for social media that apply to quick-to-expire content, videos, and live streams.

Endorsements using quick-to-expire content like Snapchat or Instagram Stories:

You need to superimpose the disclosure on the image or video.

Endorsements via video:

You must mention your relationship in the video, not just in the video’s description.

Endorsements via live stream:

You need to mention your relationship periodically during the stream.

Best practices for AI disclosure

The FTC has offered guidance in 2023 on disclosing how companies use AI. Most directions focus on being transparent with your audience. Here’s what you should know:

Use “double disclosures” when sharing AI-generated content on social

If AI-generated content is shared publicly via an influencer marketing campaign, you need to disclose that it’s sponsored content and AI-generated.

Additional FTC disclosure requirements

When you promote a product, you must be truthful. More specifically, the FTC says you can’t:

Talk about a product, service, or experience you’ve never tried.
Say a product is terrific if you think it’s terrible (even if you’re getting paid).
Make claims that require proof, like saying a product has medical benefits that you can’t prove.

FAQs about FTC disclosures

Is disclosure necessary if an influencer buys a product and promotes it?

If you buy the product yourself and the brand is not paying you to endorse it or giving you any perks to mention it on social media, you don’t have to disclose anything.

If an influencer receives a free product in exchange for a review, should that be disclosed?

Yes. If an influencer receives a free product or anything of value, that relationship must be revealed to the audience. Even if an influencer only receives the product and no additional compensation, it must be disclosed.

If an influencer reviews a product or service for a family member, are there different rules?

If you have a personal or family relationship with a company, you should disclose that relationship in your review.

What are the rules if a company sends an influencer a product for free but doesn’t formally ask him or her to endorse it?

Even if an influencer is under no obligation to review a product, if you do so, you should disclose that the product was sent for free.

Is tagging a brand in a post considered a disclosure?

If you receive anything of value in exchange for your post, you must do more than tag the brand. You must clearly state that your review or message is an ad.

If you tag a brand simply because you love a product, and you weren’t asked to say so or given any perks to write something favorable about the brand, you don’t need any further disclosure.

2023 Updated FTC guidelines

Recently, the FTC announced that it had finalized revised Guides Concerning the Use of Endorsements and Testimonials in Advertising, which, at their core, “reflect the basic truth-in-advertising principle that endorsements must be honest and not misleading.”

The FTC also has proposed a new Trade Regulation Rule on the Use of Consumer Reviews and Testimonials.

To help you sort through the changes and additions, here are some of the highlights from each that marketers and influencers need to know.

Changes to “The Guides”

The commission updated several important sections in its “Guides Concerning the Use of Endorsements and Testimonials in Advertising.” These are some of the most notable takeaways.

Consumer reviews

The commission added new wording to prevent advertisers from “procuring, suppressing, boosting, organizing, or editing” consumer reviews of their products or services in a way that distorts or otherwise misrepresents what consumers think of their products.

Brands repurposing influencer-generated content and user-generated content need to be especially cautious about only using reviews for the product it was originally written or created for.

Incentivized, employee, and fake negative reviews

The updated guides and the new trade regulation rule (see below) include additional language to help businesses determine when reviews qualify as an endorsement, and how they could be deceptive or misleading to consumers.

Defining “clear and conspicuous”

Spelling out the definition of “clear and conspicuous,” the commission wanted to avoid ambiguity to avoid confusion. The new guide included a warning that built-in disclosure tools on platforms might not be sufficient for businesses aiming to be transparent.

New definition of “endorsements” and “endorsers”

The FTC clarified the extent to which people, messaging, and even social media tags are considered “endorsements” and “endorsers.”

Businesses need to know that the updated guidelines indicate that endorsements can be “verbal statements, tags in social media posts, demonstrations, depictions of the name, signature, likeness or other identifying personal characteristics of an individual, and the name or seal of an organization.”

Potential liability

The commission better addressed the potential liability of advertisers, endorses, and intermediaries if they violate the law.

Of particular note is that even when the endorser is not liable, the advertiser’s liability may extend to deceptive endorsements. Additionally, even if the endorser’s statement is true, an advertiser can still be liable if the endorsement is deceptive.

Child-directed advertising

With heightened concerns about child-directed advertising, the commission emphasized that ad endorsements directed to children need particular consideration because of the “character of the audience.”

Although the commission decided that specifics of disclosures of material connections don’t necessarily need to be addressed in the guides themselves, the group acknowledged that cognitive development experts suggest that disclosures won’t work for younger children.

New trade regulation rule

The new rule is designed to prohibit “certain specified unfair or deceptive acts or practices involving consumer reviews or testimonials,” practices which the commission found to be “prevalent.”

By clearly spelling out prohibited practices as illegal, the FTC hopes to deter companies from deceptive marketing strategies while authorizing courts to impose civil penalties. The following practices would be prohibited:

Selling or obtaining fake consumer reviews and testimonials

The rule prohibits businesses from writing or selling consumer reviews or testimonials by someone who:

Doesn’t exist
Doesn’t have experience with the product or service
Misrepresented their experience

Hijacking reviews

Businesses are banned from using or repurposing a consumer review written for a product in ways that make it appear to have been written for a “substantially different” product.

Buying positive or negative reviews

This rule prohibits businesses from providing compensation or other incentives “contingent on the writing of consumer reviews” — with either positive or negative sentiment.

Using insider reviews and testimonials without disclosing the relationship

If your company’s officers and managers write a review or testimonial about your products, you must disclose their relationship to your business. In addition, it would prohibit specific solicitations by officers or managers of reviews from any company employees or their relatives.

Creating or controlling websites that claim to provide independent opinions

Businesses can’t create or control websites that claim to share “independent” opinions about a category or products that include their products.

Suppressing reviews

In addition to prohibiting businesses from using intimidation, false accusations, or unjustified legal threats to prevent or remove negative consumer reviews, this rule would prevent businesses from misrepresenting their reviews to consumers. For example, if negative reviews have been “suppressed,” businesses can’t trick consumers into believing that the reviews on their website represent ALL submitted reviews.

Selling fake social media indicators

Businesses can’t sell “false indicators of social media influence,” such as fake followers or views.

Before you strategize for your next marketing campaign, review the new guidelines and trade regulation rules. Then ensure that you’re not violating best practices on any of your channels before ensuring that any new campaigns will comply. With a commitment to be truthful in advertising and to market with integrity, your brand should have no trouble staying on the path to success.