The FTC Wants You To Know When Influencers Have Ties To The Products They Hawk


Social Media Week

The FTC has issued new regulations that will directly impact influencers and word of mouth marketing at large.

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The Federal Trade Commission (FTC) is once again issuing concrete policies around social media endorsements on the heels of Thursday’s settlement of charges against YouTubers Trevor “TmarTn” Martin and Thomas “Syndicate” Cassell. Last year, it was discovered the two had been regularly promoting a gambling website without disclosing that they were moonlighting as owners of that very same site.

The ruling sets forth a strong precedent for influencers and marketing practitioners who work with them: Disclose any and all connections to the brands they promote or face the consequences.

In May, the FTC issued new guidelines which stated that influencers must disclose if they were compensated for their posts. The goal of this policy was to make it easier for consumers to delineate between organic and sponsored content. The FTC specifically stated that using vague hashtags (#partner vs. #ad) would not cut it moving forward. For related reasons, the guidelines also stated that all disclosures must appear above the “more” CTA appearing at the end of image descriptions on Instagram.

As of this week, the FTC is further defining the best practices for proper disclosure, having issued additional warning letters to more than 20 undisclosed Instagram influencers. Key updates to their Endorsement Guides are as follows:

  • Clearly disclose when you have a financial or family relationship with a brand
  • Don’t assume your followers know about all your brand relationships
  • Ensure your sponsorship disclose is hard to miss
  • Don’t assume disclosures built into social media platforms are sufficient
  • Treat sponsored tags, including tags in pictures, like any other endorsement
  • Don’t use ambiguous disclosures like “thanks,” #collab, #sp, #spon or #ambassador
  • On image-use only platforms like Snapchat, superimpose disclosures over images
  • Don’t rely on disclosures that people will see only if they click “more”

So, what does all of this really boil down to? Put plainly, the FTC is trying to tame the Wild West nature of influencer marketing and word of mouth, which continues to grow as a primary marketing tactic for many brands and business owners.

“This is, in a way, the future of advertising, and of engaging with consumers,” said David Mallen, an advertising lawyer with Loeb & Loeb in a recent MediaPost article.

Companies utilize WOM namely because it’s believed to carry greater influence on purchase than traditional paid media. A 2014 WOMMA study found that a single word of mouth impression has up to 5X the impact of a paid media impression on ROI.

With these latest efforts, the simple choice remains for marketers: play by the rules or pay the price.

Cover photo via http://realbusiness.co.uk/

 

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SMW Staff

SMW News, Social Media Week

@socialmediaweek

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