Wanna Be An Influencer? A Legal Guide to Social Media

Social Media Influencer Law

With some of the top influencers reportedly making $250,000 for a single Instagram post, snapping selfies has become a career. Since the emergence of social media platforms, companies have been using influencers as a tool in their marketing and advertising strategies. In response to the growing prevalence of influencer marketing, the Federal Trade Commission (FTC) has increased legal requirements and guidelines for influencers’ social media posts, even going so far as imposing enforcement actions and fines for those who violate these guidelines.

Whether you are a company utilizing an influencer or an influencer yourself, it is important to be aware of and heed the FTC guidelines.  

Material Connection

The FTC’s primary concern regarding influencers is that paid social media posts must be truthful. When a company compensates an influencer for a social media post, it is considered misleading if it is not clear within the post that the influencer is being paid to endorse the product. The audience could believe that the post is autonomous, therefore giving the endorsement more credence. In order to make the post more truthful, the FTC requires the influencer to disclose any “material connections” to the product being endorsed.

A material connection occurs when the influencer is being compensated in any way for the post. Compensation can include a cash payment, free products or samples, free accommodations or travel, discounts, sweepstake entries, or any other incentive.

If there is any material connection between the influencer and the company, the influencer must disclose that connection.

Disclosures

Influencers must disclose a material connection in a way consumers can easily find and moreover, obtain enough information to understand the value of the endorsement.

The most common way material connections are disclosed on social media is through hashtags in the caption of a post. The following are examples of hashtags that are acceptable to the FTC:

  • #ad
  • #paid
  • #sponsored

The brand name must also be included either as its own hashtag or in the caption.

The placement of the disclosure in a caption is also important. Below is an overview of a few major platforms’ current requirements for sponsored influencer posts:

  • Facebook
    • The disclosure must be before the “Show more” link.
    • Use the branded content tool to tag the company.
  • Instagram
    • For posts, the disclosure must be before the “More” button.
    • For stories, the disclosure must be superimposed on the image.
    • Use the branded content tool to create the, “Paid partnership with…” message above the post or story.
  • Twitter
    • The disclosure must be in the first 125 characters of the caption.
  • YouTube
    • The disclosure must be in the description, displayed in the video itself, and displayed long enough for the viewer to read and understand it. YouTube offers some optional features such as automatic text overlay, static titles, and end cards to help configure a sufficient disclosure.
    • Notify YouTube that the video includes paid content by checking the “Video contains paid promotion” box under Advanced Settings.
  • Snapchat
    • The disclosure must be superimposed on the image.

Honesty

Lastly, the FTC requires that the influencer’s post reflect his or her own honest beliefs, opinions, or experiences. A consumer could be misled if a social media post seems to reflect the influencer’s own feelings, when in actuality, it is what the company paid the influencer to say. Therefore, if the influencer is claiming to use the product and the effect of such product, the advertisement must reflect the influencer’s true experience to avoid misleading their audience.  

Social Media Endorsement

With the amount of money up for grabs as an influencer and the benefit of having an influencer endorse your product, it is important to enter a social media endorsement agreement. A social media endorsement agreement should clearly state:

  1. what the company expects from the influencer, including number of posts and number of followers the influencer must retain;
  2. the guidelines the influencer must follow, such as the above discussed FTC requirements;
  3. how the influencer is compensated;
  4. how the company will monitor the influencer to ensure the influencer is following the guidelines; and
  5. any other terms of the relationship.

If you are thinking of entering into a social media endorsement, consult an attorney familiar with advertising and marketing to ensure compliance with the FTC’s guidelines. 


Tahlia Clement

Tahlia Clement’s primary practice areas are marketing, advertising and promotions law, health law, internet law, and general business transactions. Tahlia graduated from SMU Dedman School of Law and holds a B.A. in journalism and mass communications from Arizona State University.

Advertising Law: Disclosures

We all know that advertising can’t be deceptive or misleading — but what does that really mean? This is the first of a series of articles by media lawyer Debra Witter to help make sure your ads and website are always on the right side of the law. Today we’ll talk about disclosure (you know, the “fine print”).

  • You can “clarify” a claim with a disclosure, but you can’t contradict it.
  • If you need to disclose something to make your ad or website not misleading, the disclosure needs to be easy to see and in reasonable proximity to the claim.
  • These same rules apply to social media advertising — even though the available real estate is far more limited.
Sweepstakes Law | Farrow-Gillespie & Heath LLP

Two Avoidable Errors in Sweepstakes Events

“Sweepstakes” can be generally defined as random drawings for prizes.  All sweepstakes are regulated by federal law and also by the law of the state in which they are held.  The key to holding a lawful sweepstakes is to take the appropriate steps to avoid its being characterized as a lottery, which is generally illegal unless run by a governmental agency.

One way of ensuring the legality of a sweepstakes is to eliminate “consideration” on the part of the consumer.  That is, generally speaking, if the consumer pays money or contributes or parts with something else of value to participate in the sweepstakes, then the sweepstakes is likely in violation of the law.

A second absolute requirement for holding a lawful sweepstakes is to publish a disclosure and list of rules that contain all of the elements that state and federal law impose.

Sweepstakes law can be a minefield for the unwary. For more information about sweepstakes law, or to schedule a consultation, contact attorney Debra Witter, who represents clients in advertising and promotion law matters nationwide.