How The FTC Endorsement Guidelines Protect Influencer Marketing
In the United States, influencer endorsements are regulated by the Federal Trade Commission, but there’s some confusion about the guidelines, and what happens if they are not followed.
It’s extremely important that brands, and influencers, abide by the FTC rules because there are some serious consequences (usually financial) that can, and do, occur.
In 2015, Lord & Taylor settled charges laid against them by the FTC, after they deceived customers protected under the new native advertising guidelines.
As a brand or an influencer you should be aware of the FTC rules before engaging in any influencer marketing. To make it easier, this is an outline of what you should know:
- What is the FTC?
- Why should brands and influencers be aware of their endorsement guidelines?
- What do the guidelines cover?
- How following the FTC’s rule on endorsements helps protect (not hinder) influencer marketing success.
This post will cover all of the above, but we encourage everybody to continue their research on the Federal Trade Commission website: The FTC’s Endorsement Guides: What People Are Asking
What Is The Federal Trade Commission?
The FTC was set up by President Woodrow Wilson in 1914 to protect consumers from deceptive or fraudulent business practices, and promote fair competition in the marketplace. The FTC collects complaints, conducts investigations, sue companies that violate the law, create new regulations, and educates consumers and businesses on their rights and responsibilities.
Why Should You Know The FTC Endorsement Guidelines?
The FTC is going to be part of any advertising conducted by a brand, or an influencer (whether it’s part of influencer marketing or not.) If you’re going to be in the business of paying, or being paid for, advertising it’s a good idea to be familiar with the rules.
In 2016 Warner Brothers was charged by the FTC for failing to tell consumers, “clearly and conspicuously”, that the social media content influencers had published was sponsored by WB.
The consequences for not following the FTC endorsement guidelines can include hefty fines, or more if repeat offenses occur.
While there have not yet been any consequences for influencers it’s good practice to ensure that as a contracted blogger you follow the rules. There’s a chance that the FTC targets influencers if violations become widespread.
What Do The Guidelines Cover?
When the FTC first introduced regulations for influencers, each publication written about a product or company had to feature the hashtags #spon or #ad. The FTC now states influencers can create their own disclosure statement, as long as it clarifies the relationship between the influencer and the brand.
When signing on with an agency, ask to see a copy of its policies and procedures on disclosures. Reputable agencies are well-versed on disclosures and FTC regulations.
If the contract does not specify how to disclose, as an influencer, speak to the campaign manager. You still need to disclose even if the contract doesn’t mention it.
When we spoke with lawyer Danielle Liss she had this advice for influencers, and brands:
“The brand is going to be responsible, if you’re working with an agency then the agency will be held responsible, and then you, as the person who is putting out that marketing message, could also be held responsible. Anybody who is part of that process can be liable. The key is making sure you disclose and then you should run into any issues.
Remember, if you’re getting something from the brand whether it’s product or compensation, it needs to be disclosed.” – Q&A: An Influencer Marketing Expert Answers Your Legal Questions
How The FTC Endorsement Guidelines Protect Influencer Marketing Success
As consumers we never want to feel cheated, or lied to in any way, which is why it’s vitally important for people to know when something is a genuine endorsement, or an advertisement. In the case of influencers the lines can be blurred a little bit when a blogger genuinely loves a brand but is also being paid to create content for them.
There is a level of trust between the influencer, and the consumer, that rarely exists between a brand and its shopper. Unlike ads, which are paid for by big (and often impersonal) businesses, sponsored influencer content is published by someone who is relatable – a real person, with real opinions.
The FTC errs on the side of caution when it comes to paid endorsements. Even if the blogger genuinely likes and purchases that brand’s products they must legally disclose their role in a campaign.
Influencer marketing success is protected by disclosure because consumers don’t feel like they’re being lied to but they also benefit from the ideas influencers create through their content.
Acorn Influence has had the pleasure of working with some of the biggest, and best, brands in the world. Our case studies page features examples of how influencer marketing is providing true ROI for agencies, and brands alike.