Did the FTC Just Crush your Influencer Dreams? #29

Did the FTC Just Crush Your Influencer Dreams? #29 ⚖️

Ahoy from sunny and warm Austin, TX. 🔥

The FTC governs a lot of what marketers can and cannot do in the interest of protecting consumers.

For the first time in 14 years, they dropped some significant new guidelines to be aware of directly impacting Influencer Marketing.

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Summary 👓

• The FTC has revised its Endorsement Guides to take into account how brands reach customers.
• Brands, agencies, and influencers are liable and should review their policies to ensure they comply with the FTC’s new guidance. ⚖️
• Many commonly used disclosures, including ones built into platforms, and even standalone hashtags, may no longer be considered sufficient. e.g. #ambassador #partner 🤳
• Brand Advertisers and Agencies need to 1) provide guidance on the rules, 2) monitor compliance, and 3) take action in the event of non-compliance
• The FTC proposed a new rule to combat misleading consumer review and testimonial practices just a day after releasing the updated Endorsement Guides. More rules and more enforcement are coming. 😳

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Special thank you to DG Law, MarTech Record, and Tricia Meyer for a lot of great info and sources cited in more detail below.

Higher Standard of Clarity in Ad Disclosure

Tricia sums it up well stating “Clear and Conspicuous” means “Unavoidable.”

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Disclosure Needs To Stand Out 💥

FTC articulates a stricter definition for “clear and conspicuous” disclosures, going above and beyond the prior standard that such disclosures be “noticeable and easily understandable” to mandate that online disclosures must be “unavoidable.”

“Unavoidable” means that a consumer cannot miss the disclosure and must not be required to click through or take other actions to see material information.

that disclosures should be placed where ordinary consumers will not miss them and displayed in an easy-to-read font that contrasts enough to stand out from its background.

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Disclosure Needs to be clear to the group targeted 🎯

If you are targeting people over 60, or Spanish speakers, it needs to be clear to that group.

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Add the Brand Name to the Disclosure ™️

While the FTC continues to advise that starting a post with “Ad:” or “Paid ad” or “#ad” or “Advertising:” or “Advertisement” would likely be effective and that the words “Sponsored” and “Promotion” at the beginning of a post “might” also be effective, it is now saying that disclosures like “Sponsored by XYZ” or “Promotion by XYZ” would be clearer (where “XYZ” is a brand name).

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Default Platform Disclosures are not enough 💻

The FTC is saying you need to not rely on existing tools or platforms and you will need to write in the disclosure manually. FTC has offered to work with platforms to improve tool options.

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Brands need to disclose Ad in the repost ♻️

They might be liable if they don’t disclose in reshares or reposts.

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Disclose Expected or Typical Results backed by data 📢

Even when brands use a real customer’s testimonial, if the results were atypical, they must say so and disclose the expected or typical results based on reliable scientific evidence.

Moreover, advertisers cannot pair a testimonial with a misleading image.

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Reviews & Followers = Too Legit, or Quit 🥸

Fake positive and fake negative reviews are a no-no.

FTC Guidelines say that advertisers should not take actions that have the effect of distorting or misrepresenting what consumers think of their products, regardless of whether the reviews are considered endorsements.

Using fake social media followers is a deceptive business practice.

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We Are Going Down Together Brothers… and Sisters 👮

Brands and Agencies could also be liable if an influencer misrepresents a product or their experience with the product.

Brands and Agencies need to give guidance to influencers to avoid misleading customers and make correct disclosures.

Brands that act in good faith and provide effective guidance may reduce the risk of facing an FTC enforcement action.

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Don’t Mess with the Kids 👧

Ads that include endorsements and are targeted at kids may fall short of the FTC’s requirements, even if they include a disclosure that any adult would find clear and conspicuous.

Brands Agencies and Influencers will need to be even more careful here.

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Sources: 📚

FTC Law on Endorsements Guiding Influencer Marketing

Tricia Meyer - Head of PMA update on FTC influencer marketing ruling

DG Law Deep Dive on FTC Guidelines

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Next Steps ✅

Pretty clear!

Brands, Agencies, and Influencers need to:

• Read up on the revised FTC Guidelines and supporting analysis above
• Be very clear and check in with each other, developing a plan
• Revise their approach to follow these guidelines to mitigate their risk and legal exposure to these new guidelines aiming to protect customers.

Have an amazing rest of your week!

Tye