Creator Engagement

FTC guidelines on Influencer Marketing: What you must be careful about

Here's what you need to know today 👇
Posted on
August 9, 2022
4 minute read
Aanchal Parmar
Marketing at SARAL

Influencer marketing has been in the marketing ecosystem for a long time.

49% of Consumers depend on Influencer recommendations. However, until now, the US Federal Trade Commission hasn’t enforced any guidelines or rules regarding the transparency of sponsored influencer and celebrity posts.

So safeguard your brand and update yourself with the latest guidelines before you search influencers for your next campaign.

This post covers:

  • Basic guidelines
  • Disclosing Material Connections
  • How to Make Disclosures Clear?
  • Miscellaneous Guidelines to Remember
  • Wrapping up

Some basic guidelines to start

Make sure your creator's audience knows that it's a sponsored post

For example, if your influence-partner is using Instagram to deliver the endorsement, they can use the partnership tag to disclose the endorsement.

When a post is tagged, people will see “Paid partnership with [your brand]“ in the post’s header. The same goes for Instagram stories as well.

Source

Disclosures must be upfront

Don’t make your viewers click “more” to view your disclosures. So make sure whenever your influencer makes an endorsement for your brand, they add the disclosure before any "more" link in the post since FTC guidelines say that disclosures must appear right at the beginning of an endorsement.

Make your disclosures clear, conspicuous, and unambiguous.

With the basics out of the way, let's move to the advanced stuff.

Disclosing material connections

The FTC’s guidelines make sure influencers cannot hide their “material connection” to a brand they are endorsing. (Scroll a bit to understand what that means).

It is to ensure the public clearly understands any potential bias or motivation on the influencer's post.

A potential bias means affecting the objectivity of the review due to any kind of financial holdings such as giving money to the influencer or offering free or discounted products or services to the influencer

Where it isn’t understood by the average consumer that an endorser has or will receive compensation for the endorsement, consumers need to know about this.

The FTC wants the consumers aware of the fact that endorsements may be influenced by what they have or will receive in return, and are potentially biased.

Let's understand what an endorsement actually is:

What is an endorsement?

An endorsement is when an influencer or celebrity promotes a product to their audience.

Influencers make an endorsement when:

  • They say something to influence other people's opinions about a brand.
  • They have a material connection with the brand that consumers might not reasonably expect.

Example of endorsements

Some examples of endorsements can be:

  • Reviewing any product or service in any format text, audio, or video.
  • Recommending or promoting a product, service, or brand on any social media platforms such as YouTube, Instagram, Facebook, Twitter, or Snapchat.
  • Using or promoting affiliate links.

Here's an example of an endorsement from Instagram user jadelizroper:

What is a “material connection”?

Material connection means any relationship that materially affects the endorser's credibility in the eyes of the consumer.

A material connection establishes between an influencer and a brand if the brand has done any of the following:

  • Given money to the influencer
  • Made the influencer eligible for a prize
  • Offered employment to the influencer
  • Offered free or discounted products or services to the influencer
  • Given free or discounted products or services to the influencer
  • Given money to any other person or charity

For example, if a brand has given money to an influencer to endorse their brand, disclosing this material connection to the consumers helps the consumers understand why this influencer is praising or recommending the brand.

If you send free products to influencers in seeding campaigns, those will count as material connections too!

So, your influencers must disclose any material connection they have with your brand.

How to make the disclosures clear?

Disclosure is the process of making facts and/or secrets known to the public. Disclosures must be clear and unambiguous; it doesn't matter in which format your influencer is endorsing them.

Here are the ways your influencer can make a disclosure.

Hashtags

When your influencer is using hashtags for making a disclosure, make sure they're making the disclosure distinctive, i.e., they should mention the disclosure in a way that distinguishes it from other parts of the content.

They shouldn't mix up the disclosure in blocks of hashtags or links.

And, if your influencer is endorsing your brand, product, or service on Twitter, make sure they keep the disclosure clear and don't give the excuse of limiting the number of characters.

Your influencer should use hashtags like #ad #advertisement #sponsored and should refrain from using hashtags such as #gift #thanksto[brand] to make the disclosure highly clear.

Here's an example of a hashtag endorsement on Twitter, from Wario64:

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Also, in any disclosure, make sure your influencer includes the hashtags before any "more" option in the caption.

Consumers must not be required to click "more" to view the disclosure because the FTC has clearly mentioned— disclosures must appear at the beginning of an endorsement.

Images

If your influencer is making the endorsement in the image format, they should mention the disclosure over the image itself.

But, if your influencer is delivering the endorsement as text with an accompanying image, they must make the disclosure in the accompanying text.

Here's an example from Instagram user elyse.j.h

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If your influencer is making the endorsement in Instagram stories, the story should be right up-front and totally clear that the story is sponsored.

Videos

When your influencer is delivering an endorsement in video format, it's not necessary to make the disclosure, only the video's description.

They should make the disclosure in multiple formats, such as:

  • Spoken during the video
  • In the description
  • Mentioned in the video itself just like a watermark

Here's another example of a video endorsement from an Instagram user elyse.j.h:

If your influencer is making the endorsement while live streaming, they should make disclosures regularly throughout the stream, and the same goes for longer videos.

Miscellaneous guidelines to remember

Here are some other important considerations that you and your influencer need to keep in mind.

Be honest

Your influencers must and cannot sway their opinion about your brand even if you tell them to do so by offering money or any other benefits.

Your influencer shouldn't make any false claims about your brand, product, or service.

They need to keep their endorsement fair and honest. So, be honest with the description and quality of your product, and don't force your influencers to give any false statements about the same.

Understand local laws

If you're targeting consumers in a market other than the US, your influencers might be bound by their laws.

Here are some examples:

  • Canada: Influencers are subject to the Competition Act, which is enforced by the Competition Bureau
  • United Kingdom: Influencers need to check the regulatory guidance provided by the Advertising Standards Authority (ASA) and the Competition and Markets Authority (CMA) to ensure they are compliant with UK advertising law
  • Australia: the Australian Competition and Consumer Commission (ACCC) provides some guidance for businesses that will be useful for social media influencers advertising to the Australian market

Google your local laws about celebrity and influencer endorsements just to be sure you aren’t violating anything!

Understand the other regulations

Apart from the above-discussed regulations, some other regulatory bodies may apply to your influencer's endorsement.

For example, the Food and Drug Administration (FDA) regulates advertising and has recently bought many cases against influencers endorsing vaping products.

Your influencer needs to be aware of any laws or rules that apply to the product that they're endorsing.

Reveal your brand’s social media laws

If you have any laws such as social media policy, influencer policy, or social media guidelines, make sure to share them with your influencers so that there'll be no issues and misunderstandings post-endorsement campaigns.

Wrapping up

It's essential that your influencers follow the FTC's rules for Influencers to avoid any legal issues.

And, as a brand, be honest and responsible with any laws and regulations and host honest endorsements. You can create an onboarding document which includes all rules and regulations to make it easier for influencers to understand the pre-requisites for a collaboration.

This post wasn’t meant to intimidate you. To be honest, there are many influencer programs that don't follow most of these guidelines. It’s the wild, wild, west out there. BUT, you want to make sure you aren’t violating anything critical, especially if you’re an emerging brand. You already have tons of problems and you don’t want the FTC to be one of them.

Bookmark this post and visit it frequently so you know you’re on the right track!