Since the Fyre Festival scandal back in 2017, influencers and the companies using them have been under increased scrutiny by regulators. The Federal Trade Commission (FTC) has since released endorsement guides and Disclosures 101 for Social Media Influencers to provide guidance on how to properly disclose a material connection to a company, product or service on social media.
The FTC recently announced that they will be reviewing and updating their endorsement guides and will be cracking down even harder on social media influencers and the companies using them – specifically those who are bribing influencers to not disclose their relationship with their brand and to post seemingly authentic reviews.
Proper disclosures will be as important as ever in the coming months, and failure to do so can leave brands subject to harsh penalties. As part 5 in this blog series, here’s what you need to know about properly disclosing endorsements.
Disclose Material Connections
First and foremost, influencers MUST disclose a material connection to a company, whether it’s a financial, employment, personal, or family relationship. Things like freebies, perks, swag, free travel, being an employee of the company, or having ownership interest in the company are all considered material connections.
“We pay attention to whether or not a particular advertising message or claim about a product, to the extent it's influenced by some material connection to the company or otherwise, can be misleading.”
- Sandhya Brown, Assistant Director, Division of Financial Practices, FTC
Clear and Conspicuous
Be sure to use clear and conspicuous language for disclosures, simply meaning that they’re hard to miss and easy to understand. Additionally, all disclosures should be made above the fold, i.e not hidden in the “more” section of a caption or within a large group of hashtags. Consumers should be able to tell almost immediately that this is a sponsored endorsement.
As part of the clear and conspicuous language, hashtags should also be clear in the message they’re giving. Examples like #ad, #sponsored, and #paidpartner are all appropriate to use. Avoid using any vague or confusing language or hashtags, such as #spon or #thanks, that do not clearly disclose a connection.
This requirement is simple – the disclosure must be in the same language as the advertisement itself.
Honest Opinion and Beliefs
Endorsers can’t talk about an experience with a product that they haven’t tried. Similarly, if they’re paid to talk about a product and thought it was terrible, they can’t say it’s terrific. Endorsements should always be honest and truthful.
Keep in mind that ALL claims about a product require proof from the advertiser, such as scientific proof that a product can treat a health condition. Avoid making any statements that would require proof that the advertiser does not have. The company paying the endorser is liable for statements made and could face penalties for sharing false information.
If you’d like to learn more about how PerformLine can automate the monitoring and discovery of your brand across social media, speak to one of our experts today.