Federal Trade Commission and influencer marketing
The Federal Trade Commission (FTC) is the government body charged with ensuring that online advertising practices are fair on the consumer. Lately it’s been taking a close interest in influencer marketing as it manifests itself in social media, including sites such as Instagram. The FTC publishes practice guidelines in its endorsement guides and also produces a brochure called “FTC Endorsement Guides: What People Are Asking”. These publications are aimed at influencers and marketers and give a briefing on what the FTC approves and disapproves of, when it comes to influencer marketing.
Federal Trade Commission gets tough on influencer disclosure
The FTC is very concerned about the issue of disclosure – that means disclosing the nature of the link between a brand and an influencer. They dislike ambivalent or difficult to understand references and expect any connection to be made clear within the context of the actual post. They are also concerned that the disclosure is easy to spot and will be obvious no matter what device the consumer is using. That means that if the consumer is using a mobile with a smaller screen, the disclosure must appear on the mobile screen and be placed above any “More” button. They particularly dislike disclosures that are buried in a long string of hashtags.So the FTC has set itself the goal of influencing the influencers, and has written to large numbers of celebrity endorsers to remind them that if there is a significant relationship between an advertiser and an endorser, it must be clearly disclosed.
Cases that have caused FTC disquiet
In 2014 the Federal Trade Commission took Sony and its advertising agency to task over their failure to make clear that individuals promoting Vita on social media were in fact advertising. In addition, the FTC was unhappy with the fact that the advertisements overstated the features of the product. This case specifically involved Twitter and was one of the early cases which featured promotion on social media. The Federal Trade Commission sued Sony on various grounds and Sony settled by compensating buyers of the product.
The next year, Machinima, a multichannel marketer, worked on several projects to promote the Xbox One before its launch. Machinima paid its influencers to try the box out and to make promotional videos about the product. However the influencers were not required by the agreement, to make clear that the content they were producing was sponsored. The FTC ruled that Machinima must have a better system for explaining disclosure requirements to influencers and must monitor that they were complying with the policy.
In 2016, a campaign promoting a particular dress from a designer used 50 influencers, a fashion website and Instagram for promotion purposes. The campaign was a great success but the FTC said that the campaign was misleading because it did not disclose the nature of the content that was being used – i.e. that there was a relationship between the designers and the influencers.
Also in 2016, Warner Brothers fell foul of the FTC when it paid YouTube influencers to promote a videogame. Although Warners did have some disclosure, the FTC decided it was inadequate because it wasn’t clear enough and wasn’t closely related to the actual sponsored content. As with the other cases described here, the FTC ruled that the provider must have a robust compliance regime to ensure that the rules were being observed.