Using Influencers to Promote Your Business: Legal Disclosure Requirements
With the quarantines and pandemic-era restrictions that make up our day-to-day, more companies than ever are turning to online marketing in 2021. Many of these companies or brands simply do not know the legal lay of the land in the social media marketing or affiliate marketing space. In fact, most advertising agencies are likewise in the dark.
The Federal Trade Commission has strong and specific requirements for social media advertising, affiliate marketing, online sponsorships, promotions, and sweepstakes. Any company undertaking these activities and all influencers should take care to review the relevant rules applying to them.
In 2017, FTC sent almost 100 “education” letters to brands, companies, and influencers (including celebrities and athletes) reminding the recipients of their legal obligations under the FTC’s Endorsement Guides.
Generally speaking, these letters reminded influencers who promote a company’s product or services to “clearly and conspicuously” disclose their connection with a company. Because the FTC’s enforcement focused on companies in the past, the fact that the letters went to individual influencers signaled a shift in FTC’s enforcement focus. Additionally, some of the letters addressed Instagram-specific issues. For instance, viewing Instagram on a mobile device typically only shows the first three lines of text in a caption and require viewers to click “more” to see the rest. The FTC recommended disclosure take place before the “more” button in order to be more visible. The letters also noted the risk that hashtag disclaimers get lost in a long post or in a grouping of multiple hashtags. Some letters also got more specific, noting that consumers may not understand a disclosure like “thanks #brand” or “#sp” to indicate a sponsorship relationship.
Additional FTC advice to companies using influencers or implementing an affiliate marketing campaign are to:
Establish a social media policy
Train endorsers/influencers on their policy
Proactively monitor the posts of their influencers
The FTC has also issued subsequent guidance for influencers and a variety of FAQs addressing tags in pictures, Instagram disclosures, disclosures on Snapchat, disclosing free travel, and other example terms.
If you are an advertising agency, an influencer, or a company using an advertising agency or influencer, you need a competent legal advisor. Contact us.
