Influencer Marketing And FTC Regulations


Co-founder & CEO of The Influencer Marketing Factory, an influencer marketing agency that helps brands get in front of Gen Z & Millenials.

A growing number of brands are interested in influencer marketing. It’s been predicted that brands will spend up to $15 billion on it by 2022.

But influencer marketing also has created new challenges for advertisers. The Federal Trade Commission (FTC) is looking closely at advertisers who work with influencers.

When it comes to influencer marketing, the FTC’s rules state that influencers must reveal their relationships with brands within their posts. Followers need to understand whether what they’re seeing is an ad or an organic post by the influencer. 

Violating the rules can lead to penalties, fines and legal fees. In 2016, for example, a video network settled with the FTC over undisclosed payments to online influencers. In 2014, an advertising agency working for Sony landed in hot water for urging its employees to promote a gaming console on Twitter without disclosing their relationship to the agency or Sony. 

The FTC’s rules are not new, but earlier this year, the agency called for a review of whether its Endorsement Guides are working. Commissioner Rohit Chopra said, “When individual influencers are able to post about their interests to earn extra money on the side, this is not a cause for major concern. But when companies launder advertising by paying someone for a seemingly authentic endorsement or review, this is illegal payola.”

The FTC has called for setting more formal rules to ensure that violators are liable for civil penalties. 

So, with this in mind, how can brands ensure that they’re adhering to all of the rules? Here’s my advice.

Familiarize Yourself With FTC Guidelines

The FTC lays out specific guidelines for brands to follow when they work with influencers. The first thing to take into consideration is that if you’ve paid someone to promote your product or service, they always have to disclose that.

The best case would be instructing your influencers to disclose the partnership with hashtags at the beginning of the content they post. Hashtags such as #sponsored, #paid or #ad will show followers that influencers are endorsing you in exchange for a fee. They also should include clear disclosures in their video content (e.g., “This video is sponsored by brand X), ideally within the first 30 seconds.

Be sure that text disclosures are visible and not “hidden” between other hashtags. The disclosures should be visible in the text and not in small print or available only via the “more” button. 

In addition, remember that influencers can’t talk about their experiences with products that they haven’t tried themselves. If you want influencers to promote your product, send it to them so they can try it.

Use Simple And Clear Language

Pay close attention to the language your influencers use. It is important for everyone to easily recognize a paid partnership. Influencers need to clearly state that a brand is sponsoring them or has provided them with a product. Statements like “this product was given to me by brand X” or “sponsored by brand X” will comply with the guidelines. However, something like “in collaboration with Brand X” is too ambiguous and could lead to trouble with the FTC.

Use Tools Provided By Platforms

Instagram added a “Paid partnership with” tag in 2017. Influencers can use this tag to present their content as sponsored. 

YouTube allows creators to add text disclosure statements to video campaigns. Influencers should use their video manager settings to select those requiring disclosures and declare paid product placements or endorsements.

Ensure That Your Influencers Comply

My advice is to always send influencers a PDF version of the FTC’s guidelines and ask them to confirm via email that they read and understand them. Once your influencer marketing campaign is live, I also suggest that you manually check or use specific tools and platforms to track social media content posted by the influencers working with your company to be sure they are disclosing the paid partnership. If they forget to do so, promptly reconnect with them and ask them to add disclosures as soon as possible. They could either remove the original posts and upload new ones or edit the existing ones to include the disclosures.

Summary

Influencer marketing can be an excellent way for brands to generate awareness and sales, and reviewing and understanding FTC regulations help you use this tactic in a compliant manner. With so much misrepresentation online, brands must emphasize credibility while avoiding the potential for fines and legal proceedings.


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