Hitmetrix - User behavior analytics & recording

Brands, beware! FTC updates Endorsement Guides

Brands, beware! FTC updates Endorsement Guides

Brands, beware! FTC updates Endorsement Guides

The Federal Trade Commission (FTC) recently unveiled an updated version of its Endorsement Guides, introducing specific adjustments targeting social media influencer marketing. Influencers wield unique power, forging connections with audiences in ways that traditional advertising cannot match. Consider this: When making a purchasing decision, which scenario seems more compelling?

  1. You spot an appealing swimsuit in a clothing brand catalog.
  2. Your favorite influencer, who feels like a virtual friend, showcases the same swimsuit on Instagram. They showcase various angles, colors, and styles, provide a direct buying link, and offer an exclusive discount code.

If you’re part of the millennial or Gen Z demographic, odds are you picked the second option.

Many influencers nurture trust and loyalty through non-sponsored content like ask me anything (AMA) sessions, giveaways, get ready with me (GRWM) videos, and to-be-read (TBR) lists. However, distinguishing between organic and sponsored content becomes murkier when influencers blend purchased and gifted products, such as in a GRWM video. This is where the FTC’s Endorsement Guides come into play.

These guidelines offer essential insights into practices that might be unfair, deceptive, or against the FTC Act. They outline a framework for brands, influencers, and intermediaries like ad agencies and PR firms, ensuring sponsored content adheres to the required standards. Below, we highlight key updates relevant to both influencers and brands.

When is disclosure necessary? A material connection disclosure is needed when there’s a link between an influencer and a brand that viewers wouldn’t expect in a sponsored post. In simpler terms, if a significant portion of viewers wouldn’t naturally assume a connection, then disclosure is essential. The rule applies to all influencers, regardless of their follower count, from nano influencers to mega ones. Waiting until viral status is risky—adhere to the rules proactively.

A material connection disclosure need not be exhaustive but must clearly convey the relationship’s nature, enabling viewers to gauge its significance. While there’s no magic wording, acceptable disclosures may include “Ad,” “Paid ad,” “Advertisement,” “Sponsored by XYZ,” or “Promotion by XYZ.” However, an influencer’s discount code isn’t sufficient for material connection disclosure, as it might not signify a financial tie.

Where should the disclosure appear? The disclosure must be “clear and conspicuous,” meaning it should be easily noticeable and understandable by ordinary consumers. Placement varies based on posting format. For visual endorsements like images, the disclosure should be visually presented, such as superimposed over the image or within the caption. Auditory endorsements should feature a verbal disclosure, although both visual and audible disclosures are preferable.

Platform-provided disclosure tools might not fulfill the clear and conspicuous requirement. The FTC evaluates factors like placement, readability, and clarity. Brands and influencers should exercise caution and not solely rely on these tools.

A single sponsored series necessitates a distinct material connection disclosure for each post. Assuming viewers will connect multiple posts is unrealistic.

How can brands ensure compliance? Advertisers are accountable for misleading or unsubstantiated statements made through endorsements, even if the influencer isn’t. To comply, brands should establish reasonable programs for influencer training and monitoring. While not a safe harbor, this proactive approach should reduce deceptive claims and lower the odds of facing an FTC enforcement action.

For posts with short lifespans (e.g., stories), real-time monitoring is challenging. Implementing a pre-approval process within monitoring programs can alleviate this concern.

In conclusion, the revamped Endorsement Guides serve as a roadmap for influencer marketing. Adhering to disclosure standards is crucial for maintaining consumer trust and avoiding legal ramifications. Robust training, monitoring, and compliance programs are key to fostering ethical influencer partnerships. Stay updated on any changes to these guidelines to ensure continued adherence.

See first source: Marketing Dive

Frequently Asked Questions

1. What is the purpose of the FTC’s updated Endorsement Guidelines?

The FTC’s revised Endorsement Guidelines aim to provide clear directives for influencer marketing in the age of social media. These guidelines promote transparency, prevent misleading practices, and ensure that consumers can differentiate between organic and sponsored content.

2. Who is considered an influencer under the Endorsement Guidelines?

Influencers encompass individuals across all follower counts, from nano influencers with a small audience to mega influencers with millions of followers. Regardless of your reach, if you endorse products or services, the Endorsement Guidelines apply.

3. When do I need to disclose a material connection with a brand?

Disclosure is required when a significant portion of viewers would not naturally assume a connection between you and the brand featured in a sponsored post. If the nature of your relationship isn’t clear to viewers, it’s essential to provide a material connection disclosure.

4. What should my disclosure include?

While there’s no specific wording prescribed, your disclosure should clearly communicate the nature of the relationship. Acceptable disclosures may include “Ad,” “Paid ad,” “Advertisement,” “Sponsored by XYZ,” or similar language. Avoid relying solely on an exclusive discount code as a sufficient disclosure.

5. Where should I place the disclosure?

Your disclosure must be “clear and conspicuous,” easily noticeable and understood by ordinary consumers. For visual endorsements like images or videos, the disclosure should be visually presented, either superimposed on the content or within the caption. Auditory endorsements should include verbal disclosure, ideally supplemented by a visual element.

6. Are platform-provided disclosure tools enough?

While some platforms offer built-in disclosure tools, these might not always meet the FTC’s clear and conspicuous requirement. The adequacy of these tools depends on factors like placement, readability, and clarity. Brands and influencers should exercise caution and prioritize effective disclosure.

7. Do I need to provide a separate disclosure for each post in a sponsored series?

Yes, to ensure transparency, each post in a sponsored series requires its own distinct material connection disclosure. Avoid assuming that viewers will connect the dots between multiple posts.

8. How can I monitor compliance with the Endorsement Guidelines?

Brands are responsible for ensuring compliance, even if an influencer makes misleading claims. Implement reasonable training and monitoring programs for influencers, focusing on good faith efforts, effective guidance, and corrective action to reduce deceptive claims.

9. What steps can brands take to navigate short-lived content like stories?

Given the challenge of monitoring real-time short-lived content, consider establishing a pre-approval process for such posts. This approach allows brands to maintain control and ensure that content aligns with the Endorsement Guidelines.

10. Why is adherence to the Endorsement Guidelines crucial for influencer marketing?

Adhering to the guidelines maintains consumer trust, avoids legal repercussions, and promotes ethical influencer partnerships. Transparency and compliance contribute to building long-term, meaningful connections with your audience.

Featured Image Credit: Ian Hutchinson; Unsplash; Thank you!

Related Posts