Are you complying with the current FTC rules when you ask someone to tag you on a social network?

Anyone who is paid, related through business or family or receives a gift from the company when they are tagging on social media must indicate that in their post with #ad or #sponsored.

New Federal Trade Commission rules now require business that have a relationship with an influencer to require the influencer to also identify the relationship as one that is sponsored. The FTC uses the term Endorser rather than influencer.

The new regulations are based on the truth in advertising regulations which can be found at: Guides Concerning the Use of Endorsements and Testimonials in Advertising

The FTC has determined that social media now falls within the purviews of the truth in advertising act and the FTC. The FTC has also already levied its first fines against two YouTube stars for their actions. See Three FTC actions of interest to influencers.

Because tagging on social media is now considered deceptive advertising, the FTC can levy civil fines for violations of its rules.

Definitions

Affecting the Consumer Judgement: Whether or not you believe the disclosure will affect the judgement of the influence or whether the influencer believes it will affect his or her judgment still requires disclosure.

Affiliate Program: is a program where the author receives a commission or payment from the retailer or brand for linking to their site

Aspirational Endorsements: Writing about a product or brand that you would like to get.

Deceptive Practice: An act or practice is deceptive if it misleads “a significant minority” of consumers

Endorsement: endorsement means any advertising message (including verbal statements, demonstrations, or depictions of the name, signature, likeness or other identifying personal characteristics of an individual or the name or seal of an organization) that consumers are likely to believe reflects the opinions, beliefs, findings, or experiences of a party other than the sponsoring advertiser, even if the views expressed by that party are identical to those of the sponsoring advertiser.
A Testimonial is the same as an endorsement
Tagging a product, brand or company name in a post is an endorsement

Endorser: The party whose opinions, beliefs, findings, or experience the message appears to reflect will be called the endorser and may be an individual, group, or institution.
An influencer is an endorser

Expert: is an individual, group, or institution possessing, as a result of experience, study, or training, knowledge of a particular subject, which knowledge is superior to what ordinary individuals generally acquire.

Influencer: Endorser

Like Buttons: are not disclosures. You must write or post a video or photograph of the product to classify it as an endorsement to qualify as a disclosure.

Material Connection: a connection that might affect the weight or credibility that consumers give the endorsement – like a business or family relationship, a payment, or the gift of a free product. That connection should be clearly and conspicuously disclosed unless it’s already clear from the context of the communication.

Negative Endorsements: still require disclosure

Payment: something of value of any value, a gift, money, the product itself, free stays or entrances at amusements, hotels, etc. that you mention in a post. The payment may have not actual value, if the influencer receives any type of benefit from the brand.
Payments or contributions to charity by a brand based on posts are subject to the rules.

Product:
includes any product, service, company or industry.

Relationship: Relationships require disclosure if there is a family connection or a business connection. Both connections require fuller disclosures.

Repeated Endorsements: Every time an influencer writes about a product or brand in a positive way requires a disclosure. Disclosing once and then writing about the product later requires an additional disclosure.

Tagging: Tagging falls under the disclosure rules. If you tag a product of a brand that provided you with a payment, you must disclose.

Visibility: The disclosure should catch users’ attention and be placed where they aren’t likely to miss it.

Generally, Endorsements must:

  1. must be truthful and not misleading.
  2. If there’s a connection between an endorser and the marketer of the product that would affect how people evaluate the endorsement, disclose it clearly and conspicuously.
  3. If the advertiser doesn’t have proof that an endorser’s experience represents what consumers will achieve by using the product, clearly and conspicuously disclose the generally expected results in those circumstances.

The test is whether or not knowing the endorsement or mention would influence the person reading post. Consequently, everything promoted by a brand is an endorsement because the purpose is to influence consumers.

The legal responsibility to make sure influencers understand the rules falls upon the brand. And influencers must disclose that relationship to the public.

The FTC has come up with the following rules:

  • Disclosures must be clear. They cannot be unambiguous. It must be clear that the social media post is being purchased, even if that purchase is a gift
  • Disclosures must be clear and conspicuous. Clear and conspicuous means
    • close to the claims to which they relate
    • in a font that is easy to read;
    • in a shade that stands out against the background;
    • for video ads, on the screen long enough to be noticed, read, and understood;
    • for audio disclosures, read at a cadence that is easy for consumers to follow and in words consumers will understand.
  • Hashtags can be used to make this disclosure. So far, the only hashtags are #Sponsored or #ad. There may be an opportunity to use the hashtag #Partner if it includes the name of the brand such as #PartnerManufacturer or #Manufacturer_Partner where Manufacturer is replaced with the Manufacturer or Brand name.
  • The disclosure must be visible and not hard to miss. Hashtags cannot be hidden in the middle of a group of hashtags and the cannot be added to the end of another hashtag. The disclosure must be easily spotted by the consumer.
  • Disclosures on Instagram must be above the more button in the first three lines of text.
  • #XYZ_Ambassador may be sufficient where the XYZ is the name of the brand

Examples of what the FTC thinks is a proper disclosure include:

  • Company X gave me [name of product], and I think it’s great
  • The products I’m going to use in this video were given to me by their manufacturers.
  • Paid, unless you are an employee or co-owner

What does not work according to the FTC

  • Single disclosures on a homepage that some of the products have been given to you is not sufficient.
  • Video disclosures must be in the video. It is not sufficient to post the disclosure in the description.
  • Hyperlinks are not sufficient. The disclosure must be with the product endorsement
  • “#client” “#advisor” and “#consultant are not sufficient to be a disclosure
  • “#ambassador” or “#[BRAND]_Ambassador are insufficient to be a disclosure
  • hidden or buried in footnotes
  • in blocks of text people are not likely to read
  • in hyperlinks
  • Not hard to find,
  • Not tough to understand
  • Not fleeting
  • Not buried in unrelated details
  • Not if other elements in the ad or message obscure or distract from the disclosures, they don’t meet the “clear and conspicuous” standard.

Rules for Endorsers or Influencers

  • You can’t talk about your experience with a product if you haven’t tried it.
  • If you were paid to try a product and you thought it was terrible, you can’t say it’s terrific
  • You can’t make claims about a product that would require proof the advertiser doesn’t have
  • Any claims you make must have a reasonable basis for making those claims.

What about contests or Sweepstakes

They too fall within the frame work and require disclosure. Use of the words “contest” or “sweepstakes in a hashtag are sufficient.

The FTC places the liability for monitoring social media on the company or brands who have a duty to train and monitor their networks.

These rules apply to affiliate programs with retailers or manufacturers.

If you are an employee of a company making posts on social media about the company products you must include your employment in the post. If the actions or posts of the employee, even likes or shares could be viewed as an advertisement for the company than a disclosure must be made. The hashtag #Employee is not good enough, the hashtag #XYZBrand_Employee is.

References

Influencers, are your #materialconnection #disclosures #clearandconspicuous?

Guides Concerning the Use of Endorsements and Testimonials in Advertising

Three FTC actions of interest to influencers

The FTC Endorsement Guides: What People are Asking

Answering your questions about endorsements

What do you think? Leave a comment.

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