In April, the Federal Trade Commission (FTC) sent letters to more than 90 celebrities, influencers, and brands reminding them of the FTC’s endorsement and disclosure regulations. Though enforcement has been erratic, the FTC has long been aware of the problems of influencers and celebrities failing to properly disclose sponsored content on their social media channels.
In the past, the FTC has filed complaints against large companies like Lord & Taylor, Sony, and Warner Bros. for social media and digital advertising disclosure violations, but it’s increased its focus on influencers in recent months. In sending out notices, the FTC may be indicating that it’s going to be paying closer attention to influencer posts (and maybe even holding influencers accountable). We’re breaking down the letter that was sent to influencers to get a better understand of what the FTC explained to influencers and how things may or may not change as a result.
The template letter that the FTC sent to influencers is available on the ftc.gov website. There’s some valuable guideline information in the letter, along with portions and sections set aside to be filled in with influencer-specific details. One of those sections is for individual Instagram posts.
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The inclusion of specific posts is a clear indication that the FTC is monitoring Instagram posts for compliance. Given the current platform and disclosure requirements, it would be impossible for the FTC to monitor the platform as a whole, but it’s clearly keeping an eye on top influencers (where over 90% of top celebrities don’t follow FTC guidelines on Instagram). These letters are as close as the FTC’s ever come to taking action against individual influencers and the call out of individual post violations makes it clear that the FTC is watching and may take action in the future.
The concept at the core of the FTC’s endorsement and disclosure guidelines is a “material connection” — essentially a relationship between an influencer and a brand wherein the relationship “might affect the weight or credibility that consumers give the endorsement.”
Typically we think of material connections in terms of payment or some kind of exchange of goods or services in return for favorable posts, but material connections can also include a personal or family relationship between the endorser and the brand. The letter goes on to explain that if there’s a “material connection” between the “endorser” and the brand in the photo, that connection should be disclosed “clearly and conspicuously.”
The final key portion of the letter explains what constitutes a compliant disclosure—the FTC requires disclosures to be “clear” and “conspicuous.”
With the clear and conspicuous guideline come a few key principles. First, disclosures should use “unambiguous language.” That means no potentially confusing hashtags like #sp or #spon, which aren’t a clear indication of ads or sponsored content.
Disclosures should also be in close proximity to the content in question. That means no blanket statements in bios or on other pages and no disclosures below “more” cuts. If influencers are disclosing via hashtags, the proper disclosure hashtag (like #sponsored or #ad) shouldn’t be buried or obscured in a collection of hashtag so that it gets lost. The reigning principle behind proper disclosures is that consumers should be able to discern quickly and easily that sponsored content is sponsored.
With the FTC’s letters to over 90 celebs, influencers, and brands, it’s clear that the FTC will be monitoring influencer marketing on Instagram and other platforms more closely in the future. It’s well aware that top celebrities and influencers are regularly violating disclosure regulations — the question is how long it’ll take it to enforce the rules beyond warning letters.