Influencers Need to Be Under the Influence – of the Laws Governing Endorsement Disclosures

Being a social media Influencer can be very lucrative. Brands are more willing than ever to pay popular Influencers lots of money to tap into their millions of followers, to promote their products to what has proven to be willing consumers.

The Federal Trade Commission (the “FTC”) is paying attention. They’ve consequently ramped up enforcement of the FTC Act (the “Act”), which is basically the main body of law governing truth in advertising. The Act must be followed by those endorsing or promoting products or services.

The bottom line for Influencers is that if you’re being paid, or receive something else of value (free goods, or a discount, for example) to promote a product on social, the FTC insists you disclose it . . . or else.

To help Influencers comply, the FTC’s “Guides Concerning the Use of Endorsements and Testimonials in Advertising” (the “Guides”) have been repeatedly updated since to the advent of social media, to cover advertisements, endorsements, and promotions using it. The Guides’ intention is to provide transparency, so that anyone exposed to those endorsements and promotions can determine whether they’re merely reviews or opinions of those giving them, or are paid for or otherwise supported by the provider of the goods or services. The FTC calls the latter “material connections”, which must be disclosed.

This updating became necessary to keep up with the frequent changes in existing social, and new social platforms, how they’re being used to promote and sell products and services, and the technological challenges with disclosing endorsements on certain social platforms (“How can I disclose on Twitter, when I’m limited to 140 characters?” “How can I disclose on Snap or Instagram Stories, when no written text accompanies the content?”).

In 2010, as part of the Guides updates, the FTC began publishing answers to questions they’d been frequently asked (”FAQs”) by those who promoted or endorsed products and services in digital media.

Why is this important for Influencers? The FTC is getting very aggressive with Influencers who don’t comply with the Act. In April of this year alone, the FTC sent out more than 90 “compliance reminder” letters to Influencers and advertisers. They included some heavy hitters, such as Victoria Beckham and Jennifer Lopez.

To show how serious the FTC is about non-compliant Influencers, they recently, and for first time, sued a couple of them in federal court.

Influencers need to be aware of and comply with the Guides and FAQs. Many advertisers and social platforms, like Instagram, are trying to help, by having policies in place to ensure Influencers’ compliance with the Act. But, it’s not enough.

The most recent update and FAQs were released last month. While the FAQ’s contain several new and very specific questions and answers, there are some best practices and valuable tips that can be distilled from them.

I’ve shared them with my Influencer clients and feel it’s important for every Influencer, endorser, commentator, blogger and testimonial giver to be aware of and use them.

These tips and best practices are in no particular order of importance. Not all the FAQs are completely black and white. My suggestions below are based on Influencers and endorsers erring on the side of caution.

  • Generally, disclosures should be very conspicuous, unambiguous, at the top or beginning of the endorsing video, picture, blog or post, to make it practically impossible for the consumer to overlook it. If visual content (like YouTube or another streaming video), it should be a clear, eye-catching image, as well as in text, in a large, simple-to-read font, so it contrasts with its background. Don’t use audio disclosures alone for visual content. Many users view these without sound. Repeat the disclosure periodically if you think a viewer may tune in mid-stream.
  • A single, general disclosure on your homepage, YouTube channel or the like, isn’t FTC compliant.
  • Getting a discount on something is the same as being paid. Disclose it.
  • If a brand donates to charity anytime you review or endorse one of their products, disclose it.
  • If friends or family want you to review a product or service, you should disclose it, under certain circumstances. One example is the opening of a new restaurant by your friends or family. If you’re invited to try it for purposes of getting feedback on the food and service, and you eat for free, disclose the personal relationship. Even if your endorsement isn’t asked for, but you ate for free or a discount, it could be implied that the restaurant owner(s) want you to review the restaurant. Disclose that your meal was comped or discounted.
  • On Instagram, if you tag the brand of a product, such as clothing, in a photo you posted of yourself wearing that item, that’s an endorsement that needs to be disclosed because followers should know why that item was tagged.
  • Also on Instagram, the disclosure should be at the very beginning of any pictures or text. They shouldn’t be part of the post one must view by clicking “more”.
  • On Snapchat or on Instagram Stories, superimpose the disclosure over the images. Since Snapchat and Instagram Stories expire, disclose on each post.
  • Facebook “likes” are generally considered endorsements.
  • If a brand pays you to write or say that you want to buy a certain product, such as a particular sports car, and you include a link to that brand’s site, disclose it.
  • Payment to endorse something isn’t always necessary to require disclosure. If two or more Influencers, or likely anyone else, agreed to endorse or post reviews on social of each other’s products or services, this should be disclosed. Another example is having a hotel brand put you up for free for a few nights at a new property, with the expectation you’ll write about it. Disclose it.
  • You should still separately disclose even if the social platform you’re on has a built-in feature to assist you in disclosing paid or other applicable endorsements.
  • You can use “#ad” or “#sponsored” where applicable to indicate endorsement. The best practice is to put it at the very beginning of the endorsement or review by itself, separated from, and not mixed in with, other text, links or hashtags. Hashtags like “#client”, “#advisor”, “#consultant” or “#ambassador” are too vague.
  • Saying “Thanks” to a brand isn’t enough by itself to be a disclosure. It needs to be something like “Thanks for the gift of (the product)”, “Thanks for letting me work with (the brand)”, “Thanks to (the brand) for paying me as a consultant”, or “Thanks to (the brand) for the discount on (the product)”.

My comments above are just summaries. You should read the full text of the Guides and FAQs, which are available here.

The takeaway? Influencers need to expose themselves — online to build followers and be successful, and to the FTC Guides and FAQ, so they don’t get overexposed.

Just Sayin’ . . . TM