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.
In August 2023, the Federal Trade Commission released a new set of guidelines around online reviews and social media endorsements. The most important thing to know is that the basic principles haven't changed. Fundamentally, disclosures have to be "clear and conspicuous."
Rather, the updated guidelines tackle a lot of the ways influencer marketing has evolved, such as clear disclosure for online reviews, virtual influencers and child-directed advertising.
The bottom line is that creators must be even more upfront about which posts are sponsored anytime they have a material relationship with a brand.
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.
“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.
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.
Influencers cannot assume that followers are aware of their connections to brands, and therefore MUST disclosure relationship clearly in all advertising content:
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.
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.
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.”
An oldie but a goodie, here's James talking about FTC guidelines on our podcast.
Questions about FTC guidelines? Reach out to us at hello@fohr.co.
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