By Shelly Kramer – Co-CEO of V3B & BroadSuite Media Group.
As influencer marketing becomes more entrenched as part of brands’ outreach and integrated marketing efforts, understanding the FTC guidelines and requirements relating to endorsements, reviews, affiliate programs, or promotional campaigns of any nature is critical—for both brands and the bloggers and influencers with whom they work.
In the U.S., the Federal Trade Commission’s (FTC’s) function is, among other things, to protect consumers from unfair, deceptive, or fraudulent advertising practices. To that end, when it comes to the use of endorsements and testimonials, the FTC has set out some guiding principles in their Endorsement Guides, that should be regularly applied. Helpfully, for those of us who don’t have time to trawl through the legalese, the FTC have also created some straightforward guidance with their Q & A style “What People are Asking” page, to help you quickly learn more about the impact of these regulations.
An update earlier this year to that very page signaled that the FTC was stepping up and paying more attention to the use of blogs and social media as advertising platforms. What hasn’t changed are the laws around transparency and disclosure; what is new is that the FTC now has a better understanding of the role those laws have in the online space. And what is clear is that the agency is going to be taking a greater interest in the approach brands and bloggers take to endorsements and testimonials, especially when it comes to disclosures and disclaimers.
The Endorsement Guides set out the basic principles about how advertising, including endorsements, should always be honest and not likely to mislead the consumer.
The common sense premise of the guides is that consumers should be able to trust the information that they see or hear in endorsements. Most importantly though they also need to be made aware of any material benefits that the endorser might be receiving, so that they can give the proper weight to their opinions when evaluating the recommendation.
So what should bloggers and influencers (and tweeters, likers, and pinners for that matter) be looking out for to make sure they comply with the FTC guidelines?
The rules surrounding disclosure are contained in the 2013 edition of the Dot Com Disclosures from the FTC. These guidelines make it clear that disclosure of any material connections when making recommendations or giving endorsements must be clear and conspicuous. For example, a blanket statement in the terms and conditions or “about” page just won’t do the job. According to the guidelines a disclosure should be:
The FTC guidelines even go so far as to suggest that website owners should “keep abreast of empirical research about where consumers do and do not look on a screen,” in other words, use things like eye tracking studies, so that disclosures can be placed front and center. Do you know many bloggers or influencers who do that? Probably not, but what it does reinforce is the importance that the FTC places on the disclosure. The FTC doesn’t lay down a requirement for specific wording or say that you need to use legal jargon. They just say that the consumer must clearly be given the information they need to understand the relationship of the provider with the endorser.
The use of visual media to endorse, recommend, and demonstrate is increasing as the consumption of video continues to skyrocket. Those who use video don’t escape the need to add disclosures, as this answer to a question about video endorsements in the Q & a reveals:
“It’s more likely that a disclosure at the end of the video will be missed, especially if someone doesn’t watch the whole thing. Having it at the beginning of the review would be better. Having multiple disclosures during the video would be even better. Of course, no one should promote a link to your review that bypasses the beginning of the video and skips over the disclosure. If YouTube has been enabled to run ads during your video, a disclosure that is obscured by ads is not clear and conspicuous.”
It looks like that disclosure you tucked away in the description for that video review you published might not be covering all the bases that you imagined it would!
Those that use sponsored tweets, pins, and Facebook posts can fall under the gaze of the regulators too. The FTC says that the same principles apply as with any advertising media, in that consumers need to have the relevant information to be able to evaluate any statements being made. The guidelines indicate that the addition of words such as “sponsored” or “paid”, or even the addition of #ad would be sufficient.
Tread carefully with the use of the hashtag though. As social media lawyer Sara Hawkins points out on her blog, a marketing promotion hashtag doth not a disclosure make. What might be clear to a marketing professional as a promotional hashtag might not be so clear to the average social media user; a point that the FTC might just pick up as they did with a Pinterest promotion by Cole Haan.
Ok, maybe not Big Brother, as even the FTC says they’re not in the business of actively monitoring bloggers and influencers. That doesn’t mean you can play fast and loose with the rules, though. The FTC does however promise that it will act on any possible violations that come to their attention, so beware the jealous competitor or aggrieved consumer—that might be all it takes to find yourself knee deep in regulatory hot water. Sanctions too are limited, with no fines set down in the legislation, although enforcement can result in an order to give up any money received from violations.
While the consequences might be limited, the financial and reputational cost of any violations could still be considerable. And not just for the bloggers and influencers—the FTC makes it clear that advertisers, brands, marketers, intermediaries, and affiliate companies may also be liable for any indiscretions.
It seems that regulators in the U.S. and indeed around the world are now catching up with the digital revolution. They are amending and developing guidelines to reflect the fact that the Internet has become the go to place for all of us when looking for information. The result is that any party, be they blogger or brand, involved in endorsements, sponsorships, and the like need to be aware of the rules, and apply them.
The mantra for bloggers and influencers should be to disclose whenever and wherever appropriate. Make it prominent and unambiguous and if in doubt whether disclosure is needed, always err on the side of caution. Transparency, consistency, and of course honest reviews and endorsements will gain not only a clean sheet with the regulator, but also the respect of your readers and the online communities you’ve developed; and that’s something that is definitely worth striving for. It’s also what brands are paying for—and if they don’t understand the nuances of disclosure requirements, it’s up to bloggers and/or influencers to educate them. Not knowing is no excuse for not disclosing properly.
Here’s something to think about. We get approached by brands on a regular basis as part of their influencer outreach programs. Someone inquired just the other day, wanting our team to amplify their corporate blogging efforts by not only sharing content created by the brand via our social media networks, but also to comment on various corporate blog posts. Not only is that not something we are not interested in doing, I’m pretty sure the brand—a very big one—has no idea that if they find people who are willing to comment on their blog posts for compensation, that in the comment itself, that relationship needs to be disclosed. As I said, it’s not unusual that brands and agencies, even large ones, don’t fully understand disclosure requirements, and that’s why it’s important for bloggers and influencers to be totally dialed in on this front. It’s your reputation that stands to take a hit in the event of a non-disclosure issue, and protecting that reputation should be of paramount importance.
What do you think? Have you seen any blatant reviews, promotions, campaigns, etc., that lack disclosure? Have you known anyone to get their knuckles rapped by the FTC? Do you think the laws are too harsh? Too lax? I would love your thoughts on this front.
You can find out more about the Endorsement Guidelines on the FTC “What people are Asking” page and by viewing this short video.
Additional Resources on this Topic:
– Pinterest: Quietly Making Money From Your Pins?
– Peak Buzzword? Tough Times Ahead for ‘Influencer’ Biz
– The FTC has Finally Given Some Specific Guidance on What Native Ads are Meant to Look Like