A User’s Guide to Influencer Marketing and the FTC

Using social media influencers to build awareness for products and services with a particular audience has proven to be a driving force for brands to win over customers and boost sales. The strategy is so popular that a recent marketing survey found more than 80 percent of marketers surveyed were using some form of influencer marketing.

As the strategy continues to gain traction, the qualities that make it appealing — less formality and more personality — are exactly what have gotten some influencers in hot water with the Federal Trade Commission (FTC), which regulates it by the very same rules that govern every other advertiser. A lack of transparency in these influencer relationships could have (and in some cases, already has had) real consequences for both brands and influencers.

Because influencer marketing is big business (worth an estimated $2 billion in 2017 and projected to reach $10 billion by 2020), brands need to be smart and make sure they are up to speed on FTC guidelines and regulations.

Time to Get a Game Plan

While the FTC guides themselves are full of dense legalese, a recent FAQ document gives more clarity into exactly what endorsers should disclose and what specific language can — and can’t — be used when working with brands on sponsored content.

But even that can still be confusing, so we’ve broken it down even further. Here are some simple, easy-to-follow steps to keep you and your influencers in the FTC’s good graces.

Be clear.

Being cute and clever on social media is second nature to most influencers, but when it comes to disclosing a partnership, there’s no room for interpretation. InfluencersYou cannot allude to a paid partnership, like this:

Clearly and directly state what the relationship is. This goes for brands, too. If you’re sharing the content of an influencer who was paid or compensated by you to review or use your product/service, that needs to be clearly stated. No ambiguity = no problems with the FTC.

Know your hashtags.

One of the simplest FTC recommendations is to include hashtags in sponsored posts. While some influencers have branched out into terms like #partner or #sponsored, it’s better to use #ad and #paid. They’re clear, to the point, and FTC approved. That’s a win, win, win.

Pro Tip: A hashtag or disclosure that appears below the “see more” cut off on Facebook or Instagram will not fly with the FTC. It may not be seen by some followers, creating ambiguity.

Use tools.

According to a recent survey from the Association of National Advertisers, the most popular social media channels for influencer marketing are Facebook (86 percent) and Instagram (84 percent). They also happen have features that influencers must use that add an official “paid” tag to their posts. But bear in mind that what constitutes full disclosure can vary between social media sites.

The FTC Means Business

A recent report from Princeton found that 90 percent of influencer marketing posts on YouTube and Pinterest are still not appropriately disclosed, and many influencers and brands are resisting making these disclosures clear and compliant. Perhaps that’s because there aren’t monetary fines for violations of these guidelines (a myth that the FTC’s “cheat sheet” dispels).

But don’t misunderstand, there are real consequences if you break the rules. The FAQ goes on to say, “practices inconsistent with the Guides may result in law enforcement actions alleging violations of the FTC Act.” Those actions often include influencers returning any compensation they received for the post(s) that were not in compliance.

Last year, the FTC sent out more than 90 letters to influencers warning them of being in violation of the guidelines, and last summer, it settled its first-ever complaint. But that’s not all. Back in 2016, the FTC cracked down on Lord & Taylor when the retailer failed to acknowledge that it paid 50 bloggers to photograph themselves wearing the same dress. And in recent weeks, well-known influencer DJ Khaled backed off promotional posts featuring several liquor companies after taking heat from watchdog groups.

It’s clear that companies will be held accountable, so businesses partnering with influencers need to make sure they:

• Understand the guidelines (compliance starts at home)
• Have a plan and process in place for abiding by those rules
• Clearly communicate those processes (and the potential ramifications of non-compliance) with your influencers

The most important thing to remember is that FTC guidelines are for the benefit of all consumers — to stay honest and true to them. Influencers (and the brands they work with) need to take the time to educate themselves on these rules to avoid misleading their followers. This transparent, FTC-compliant approach will result in both the brand and the influencer having stronger relationships with consumers in the end.