Full Disclosure, The Ins-and-Outs of FTC Influencer Marketing Regulations

The Instagram influencer marketing space alone is officially worth over $1B. Brands are collectively paying over a billion dollars a year to have celebrities, influencers, micro-influencers, and their everyday fans promote their brands on Instagram. Unfortunately, according to a recent study by mediakix, 93% of influencers (infographic) aren’t meeting Federal Trade Commission regulations with their posts! This could mean big fines, lawsuits, and worse for brands AND influencers that aren’t including the necessary FTC disclosures in their messaging.

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Even if your brand doesn’t utilize big name celebrities, you can still find yourself in fault of these regulations, as they also apply to promotions, sweepstakes, and contests being shared through any social channel by anyone that is compensated in any form. Regardless of their audience size, if someone joins your contest and earns another entry by referring a friend via a social network, that message is subject to FTC regulations. (By the way, we get that this is a bit complicated, that’s why we’re here to help if you have any specific questions.) 

 

Why is the FTC Involved?

The FTC guidelines (first outlined in 2009) were put in place for good reason. A recent study found that, 77% of individuals didn’t interpret native advertising (in-feed ads on webpages and social networks) as advertising. One only has to look at the recent Fyre Festival to see an example of the carnage that can be caused when celebrities and influencers mislead their audience by posting what their audience sees as personal content even though the post is actually an ad. In the case of the Fyre Festival, some of the influencers are even being sued (or named in class action lawsuits) for not following FTC guidelines on their paid promotion of the festival.

Fyre Festival isn’t the first brand to face legal consequences for not following FTC rules. Cole Haan, Sony, Xbox, Warner Bros and others have been dinged by the FTC for not properly disclosing that messages shared by influencers on the brand's behalf were paid messages. It doesn’t stop with brands either: just this April, the FTC sent letters to 90 influencers reminding them of the need to disclose their relationships with brands in their social postings.

Bottom line? These FTC guidelines aren’t going away, and brands and influencers should expect to see these regulations enforced more often as the market space continues to grow. 

 

What Type of Posts Need to Meet FTC Guidelines?

If you are engaging in influencer marketing, either from a brand or influencer standpoint, it’s a good idea to familiarize yourself with the FTC’s Endorsement Guide; however, most of the FTC guidelines can be summed up simply as: if you, as an influencer, receive any compensation for endorsing a brand or product, that compensation needs to be disclosed to your followers.

In the immortal words of the FTC, “The question you need to ask is whether knowing about that gift or incentive would affect the weight or credibility your readers give to your recommendation. If it could, then it should be disclosed.”

This “compensation” includes:

  • Being paid directly for the message
  • Receiving free product
  • Receiving discounts (including even a $1 off coupon)
  • Free meals (reviewing food products or restaurants)
  • Entries into sweepstakes, contests, and giveaways

Money Storm

The above counts for both positive AND negative sentiments. If you receive a pair of running shoes from a brand for free and review them unfavorably in a YouTube video, you are still required to say that you were given a free pair of shoes.

Both brands and influencers have an obligation to adhere to FTC regulations. A recent study found that one in four influencers are asked are asked by a brand not to disclose paid promotion. This is a clear violation of FTC guidelines and could land both the brand and the influencer in trouble. Brands should also know that this applies to both B2C and B2B companies. According to IZEA, a whopping 33% of B2B marketers said they weren’t aware of the FTC guidelines.

 

How Do I Ensure My Message Is Compliant with FTC Regulations?

In general, bring full transparency to the post. If it’s a video post, simply state that the brand provided compensation for the post during the video. Likewise, a notice on the start or end of a blog post is enough to meet FTC regulations.

For Instagram, Facebook, Pinterest, Twitter or any other social media platform, you can use specific hashtags to meet disclosure requirements. At SocialToaster, our brand advocacy programs are specifically designed to make it easy for a brand’s fans to share their messages to their fans, friends, and family. As such, SocialToaster has worked with brands on identifying hashtags that are both FTC compliant and are short enough to fit in most copy.

FTC compliant hashtags include:

  • #ad
  • #sweepstakes (#sweeps is not enough)
  • #contest
  • #promotion
  • #promo
  • #entry
  • #sponsoredpost

We recommend that brands choose the hashtag that works best for their marketing and branding message. Further, brands can personalize these hashtags to make them feel more brand-centric. For example, Acme Corp. could use the hashtags #AcmePromo or #AcmeAd. The disclosure should be in one hashtag, don’t use #Acme #Ad as an example.

Pro Tip: Place the disclosure in an image attached to the message if you find yourself running out of room in the post.

As a quick plug (hey, it is our blog after all), the SocialToaster platform automatically adds these hashtags to your posts. It’s an easy way to ensure your posts meet FTC guidelines without having to take the extra time to handle it yourself.

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Any Questions?

As with most regulations, there are always nuances, so in no way should this be considered the only advice to adhere to. If you’re ready to start your FTC-compliant brand advocacy program, schedule a SocialToaster demo today! We’re happy to walk you through everything you’ll need to know to stay on the right side of the law.