The information contained in this article is provided for informational purposes only, and should not be construed as legal advice on any subject matter. You should not act or refrain from acting on the basis of any content included in this article without seeking legal or other professional advice.
This post was last revised on July 6, 2022 with updated information on FTC compliance for influencers
Why do brands use influencer marketing?
Social media influencers and content creators play a strong role in building brand credibility. With thousands of brands competing to advertise their products on nearly every platform we view, it’s natural that they are looking for new ways to get their message across in the most authentic way. This has led to brands building relationships with influencers — generally defined as an individual with a significant social presence and following that has influence over a specific audience. With digital channels being flooded with branded content, influencer endorsements feel more genuine and authentic than traditional ads. In addition to creating more sincere messaging, influencer marketing is able to quickly generate widespread, mainstream knowledge of a brand’s product or service.
Who is the FTC and why do they regulate influencer marketing?
The Federal Trade Commission (FTC) works to stop deceptive ads and protect consumers from misleading or fraudulent advertisements. The FTC’s truth-in-advertising laws state that when a consumer sees or hears an advertisement, the ad must be truthful, not misleading, and backed by scientific evidence (when appropriate).
As more consumers are using social media to discover brands, more brands are choosing to adapt their marketing strategy to reach their customers online in a more relatable way. This has led to the rising popularity of influencer marketing.
However, influencer marketing has come under fire as a new generation of consumers are looking for honesty and transparency from brand-influencer relationships. In 2019, the Federal Trade Commission (FTC) released a new set of guidelines on how brands can stay on the right side of the law by making advertising less deceptive. According to the Harvard Business Review, 19% of consumers have purchased a product because it was promoted by an influencer on social media. Brands need to be transparent about the authenticity of their advertising, and whether it is a paid partnership or not to comply with the latest FTC guidelines.
What can your brand do to protect yourself?
Brands who are launching an ambassador program (or who already have an established community) should assume that each of their ambassadors is an “influencer” in the eyes of the FTC. Here are some scenarios where your ambassadors may have to disclose their partnerships with your brand, even if they think their evaluation is unbiased:
- If they have any financial, employment, personal, or family relationship with a brand. Financial relationships are not limited to money, but might also include free or discounted products, or anything of value given in return to mentioning any merchandise or services.
- Tags, likes, pins, or any other similar ways to support a brand are considered an endorsement; therefore, the partnership needs to be disclosed.
- If posting from overseas, U.S. laws apply if the post will affect U.S. customers.
There are many different ways for ambassadors to disclose their endorsement. No matter which they choose, the goal is to make sure it is clearly and visibly displayed. Here are some suggestions on how to properly disclose a paid partnership that would be hard to miss:
- Use simple and clear messages such as terms like ‘ad’, ‘advertisement’, ‘sponsorship’, or simply thank your brand for a free product. These terms are great to use in the posts captions or hashtags.
- On a space-limited platform, use the words ‘partner’ or ‘ambassador’ to convey the message.
- If it is a photo endorsement, display the disclosure over it and make sure viewers have enough time to notice it.
- If it is a video endorsement, the disclosure should be in the video itself.
- If it is a live-stream endorsement, the disclosure should be repeated periodically.
- Do not include it only on an about me page or profile page, at the end of the message, or anywhere where people would require to click beyond the post.
- Do not mix it into a group of hashtags.
Your brand can use SocialLadder to ensure your ambassadors are up to speed with FTC compliance guidelines. Here’s how:
- Before joining your community in-app, ambassadors must accept the terms and conditions set by your brand — which FTC compliance can be built directly into. This way, ambassadors agree up front to comply with the guidelines set by the FTC, whether or not it is specified in the challenges assigned to them.
- In each of the challenges you assign your ambassadors, include clear instructions that require FTC compliance in order successfully complete a challenge (i.e. “be sure to include #brandpartner in the caption”).
- Set in-app reminders with custom feeds and push notifications to keep your ambassadors informed as they scroll through the latest from your brand.
In general, we recommend that brands enable their ambassadors to think of their role as an ambassador as a job or internship and feel as though they are an integral part of the brand. This is achieved in many ways, though communication and positioning with the ambassadors. As part of this, we recommend encouraging ambassadors to list their role as an ambassador on their LinkedIn profile, Instagram bios, Facebook profile, and any other relevant social media channel. This has the inherent benefits of building a stronger ambassador community, and creates an emotional connection between the ambassador and the brand.
SocialLadder is not a legal expert and can only give recommendations based on our experience working with many brand ambassador programs. Ultimately, the final decision on a brand chooses to comply with the FTC is left up to the brand themselves. We do suggest brands discuss with any internal counsel when possible if they have concerns about how to comply.
Interested in learning more about how SocialLadder can help keep your brand community in sync with FTC compliance guidelines while driving real conversions? Request a free demo!