By: David D. Heckman and Kristen M. Iglesias
On November 5, 2019 the Federal Trade Commission (FTC) released Disclosures 101 for Social Media Influencers, to provide guidance to social media users that recommend or endorse products in their posts, videos or other content (often called ‘influencers’). Influencers have become big business, with millions of followers and payments of tens or even hundreds of thousands of dollars per post. The FTC took action in 2017, sending educational warning letters to influencers and settling charges with two influencers popular in the online gaming community for failing to disclose that they jointly owned a gambling service they endorsed. While the new guidance does not carry the force of law, it provides helpful insight into how the FTC views the issue and will approach enforcement.
The FTC cites the need for disclosure of any “material connections” between the influencer and the brand or product being endorsed. A material connection includes any financial, employment, personal, or family relationship with a brand or product. The guidance specifies that a material connection should be disclosed by an influencer if they are being provided with any free or discounted products or other perks, even if the influencer is reviewing or endorsing a different product made by the same brand. Additionally, the FTC guidance clarifies that influencers should disclose a material connection even if they believe their review of the product is unbiased. Endorsement is similarly broadly defined, to include “tags, likes, pins, and similar ways of showing [the influencer likes] a brand or product.”
When disclosing, influencers are urged to “make sure people will see and understand the disclosure.” The FTC recommends “simple and clear” language such as thanking the company for the free product or using terms like “advertisement,” “ad,” and “sponsored” and recommends avoiding vague terms such as “thanks” and “ambassador” or abbreviated terms such as “sp,” “spon,” or “collab.” During live streams, disclosures should be repeated throughout the video or stream. Disclosures should be made in endorsement videos themselves (ideally both audio and superimposed words), not simply included in the description or post.
Perhaps the most noteworthy items in the guidance were the disclosures likely to be insufficient. The guidance states a disclosure should be placed in a way that is “hard to miss” and notes they are likely to be missed “if they appear only on an ABOUT ME or profile page, at the end of posts or videos, or anywhere that requires a person to click MORE.” Many influencers currently disclose sponsored posts by adding “#ad” or “sponsored” at the end of a post, but the FTC’s new guidance suggests clearer disclosure is required; at minimum, influencers should consider moving “#ad” or “#sponsored” to the beginning of their posts so they are clear and hard to miss.
For more information, see FTC.gov/influencers.