FTC Compliance Guidelines for Influencer Marketing: What You Need to Know

Last updated on
April 8, 2022
Grace Murray

The Federal Trade Commission has documented specific guidelines for when and how influencers must disclose sponsorships to their followers. If you work with brands to recommend or endorse products, you must comply with the law and fully disclose your relationship with that brand.

Why is this important? 

The Federal Trade Commission (FTC) is the nation’s consumer protection agency. As the influencer marketing industry and creator economy continue to grow, the FTC is looking even more closely at advertisers working with influencers and handing out hefty fines to those not complying with FTC guidelines.

  • In June 2021, Chairman Khan was appointed FTC Chair. An advocate for consumer rights and a strong tech critic, Lina’s priorities can be found in this memo
  • In July 2021, Lina reaffirmed the agency’s Section 5 authority, which allows the FTC to bypass the need to go through administrative courts to send Notices of Penalty Offenses. HERE is an example of what such a notice would look like.
  • In October 2021, the FTC issued a round of approximately 700 Notices to advertisers and released a press release stating that “[t]he rise of social media has blurred the line between authentic content and advertising, leading to an explosion in deceptive endorsements across the marketplace.”

“Briefly, what the FTC is trying to avoid is situations where companies have their employees manipulating the marketplace through fake reviews. The guidelines also prohibit using paid endorsers to deceive consumers into thinking that something is better or more popular than it actually is.” - Neal Schaffer.

Not complying with FTC Guidelines can lead to penalties, fines, and legal fees. It is up to the brands and companies as well as the influencers in the partnerships to know the law and how to disclose correctly. As the industry matures, campaigns will be held at a higher standard when it comes to legal compliance.

There is also a loud cry from consumers for authenticity and transparency regarding brand partnerships.

When do I need to disclose a brand partnership?

An influencer’s material relationship, or what the FTC calls a “material connection,” with a brand makes disclosures necessary. You must disclose the partnership if you have a financial, employment, personal, or familial relationship with a brand. This is true for both paid and unpaid partnerships, such as free or discounted products or services.

How should I disclose a partnership? 

Influencers cannot assume that followers are aware of their connections to brands, and therefore MUST disclosure relationship clearly in all advertising content: 

  • Disclose early and often. You should add the #ad, #advertisement, #paid, or #sponsored hashtag within the first few lines of your post, not hidden within a group of hashtags at the bottom. #Ad is a safe choice to use for any platform, as long as it is clearly included. #Ambassador or #Sponsored can be too vague for audiences, so being clear with specific hashtags like #Brand_Ambassador or #Brand_Partner is better. It’s acceptable to use phrasing like partner or ambassador, e.g., “FohrPartner” or “Fohr Ambassador.”
  • Choose your words wisely. Be explicit about where and how you received a product or service. Instead of saying ‘I bought this product at this store,’ explicitly state that you received the product as a part of your partnership or received this product or service as a gift. Influencers are required to disclose their relationship with the brand – i.e. that they’re a paid partner and / or that they received free product.
  • Don’t assume that your community knows your brand relationships and partnerships because you’ve posted about them before.
  • Don’t post about a product or service you haven’t tried. This is also one of our 10 Rules of Ambassador Marketing. Influencers should not speak about products they have not tried themselves, or falsely share positive testimonials on products they did not like.
  • Avoid false claims or inaccurate information about the product or service you’re endorsing. The review or endorsement needs to be honest and authentic. Influencers should share their specific, personal experience with the brand / product. These are opinions and should start with phrases like “I think” or “I felt.” Claims are facts that must be backed by data / research, and any claims made must be approved and/or provided by the brand.

Other Disclosure Tips

Photo

If your endorsement is in a picture on a platform like Snapchat and Instagram Stories, superimpose the disclosure over the photo and make sure viewers have enough time to notice and read it. When disclosing partnerships, the text must be legible and not too small to read.

Live Stream

If making an endorsement in a live stream, you should periodically repeat the disclosure so viewers who only see part of the stream will be informed.

Video

If making an endorsement in a video, the disclosure should be in the video and not just in the description. Viewers are more likely to notice disclosures made in both audio and video. Some viewers may watch without sound, and others may not see superimposed words. Ideally, the disclosure should be within the first 30 seconds of your video. Influencers should start a video by verbally stating that they are partnering with the brand, and supplement with written disclosure (i.e. in captions, text on screen). Content without a video / spoken component must include written disclosure that is visible without needing to click to view “more.”

Questions about FTC guidelines? Reach out to us at hello@fohr.co.

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