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.
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.
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:
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:
- The disclosure must be before the “Show more” link.
- Use the branded content tool to tag the company.
- 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.
- The disclosure must be in the first 125 characters of the caption.
- 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.
- The disclosure must be superimposed on the image.
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:
- what the company expects from the influencer, including number of posts and number of followers the influencer must retain;
- the guidelines the influencer must follow, such as the above discussed FTC requirements;
- how the influencer is compensated;
- how the company will monitor the influencer to ensure the influencer is following the guidelines; and
- 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’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.