UPDATE January 24, 2019 —
Over the years, influencer marketing has progressed tremendously to account for a significant portion of a brand’s marketing strategy. This growth is particularly evident on YouTube, with YouTube Creators in the 1-3 million subscriber range earning an average of $125,000 per sponsored video.
As influencer marketing becomes an increasingly substantial component of advertising budgets, the industry faces stricter FTC regulations to ensure utmost transparency and avoid costly violations. For example, the FTC sent warning letters to 90 brands and influencers in April 2017 for failing to comply with FTC guidelines for sponsored content.
Following this move, Mediakix conducted a study to review FTC compliance among Instagram’s top 50 celebrities. The troubling results—that 93% of top social media endorsements violate FTC regulations—coupled with the FTC’s determination to place more onus on brands and influencers has thus set in motion stronger FTC enforcement.
In the wake of the FTC’s crackdown, social media platforms are introducing features that foster increased transparency in sponsored content. Both Instagram and YouTube are among those that have added sponsored content disclosure features. Here, we break down YouTube’s “Includes Paid Promotion” tag to define what it is, how it fits into FTC guidelines, steps for making videos FTC compliant, and what it means for influencer marketing on YouTube and beyond.
YouTube offers a tool for declaring paid promotional content within videos. It’s available to creators as they upload content in the form of a small checkbox that serves as an indication to YouTube that the video is sponsored. Checking this box results in a small text tag on the video that says, “Includes Paid Promotion.”
Most simply, YouTube’s paid promotion tag is a written disclosure that YouTubers can add to the beginning of any sponsored video. The tag appears in the bottom left corner of a video (see image above) for the first few seconds that viewers watch. Its purpose is to call out sponsored content to viewers in a clear, standardized way, so as to blatantly signal to users that the video has been produced in partnership with a sponsor.
Using the tag is optional and creators can add the disclaimer to any existing videos without losing video views. YouTube’s help page offers a step-by-step guide walking creators through the feature.
Though the tag gives users one way to declare a video as sponsored, the FTC’s updated guidelines state that using the tag alone doesn’t sufficiently disclose sponsored content to viewers. It’s too easy to miss and doesn’t make the nature of paid promotion or material relationship between brand and creator entirely obvious.
That said, this tool is helpful for keeping influencers on the right side of FTC regulations because it signifies another effort to disclose, and it also helps YouTube place better, more effective ads by avoiding the placement of competitor ads on sponsored content.
When creating a sponsored YouTube video, creators are instructed to use a combination of the following four disclosure tips to successfully meet FTC guidelines.
The FTC guidelines are clear about the fact that disclosures must be easy for audiences to find. That means that disclosures displayed solely in video description boxes don’t hit the mark, as not all users direct their attention below the video.
Instead, disclosures should be in the videos themselves. At the beginning of the video (not the end), YouTubers should verbally disclose that a video is sponsored. Unambiguous language like, “This video is sponsored by…” should be used. Ambiguous phrases such as, “Thanks to..” are unacceptable. The FTC states that verbal disclosures should be, “read at a cadence that is easy for consumers to follow and in words consumers will understand.”
In addition to providing a verbal disclosure at the beginning of a video, creators should include text overlay informing viewers that the video is sponsored. This written disclosure must appear on the screen long enough to be read (per FTC guidelines) and easily understood. They should also include unambiguous language such as “paid advertisement” or “sponsored advertising content.”
Creators should use clear language to inform viewers that a video is sponsored within the video description and above the “Show More” button. An example of appropriate language includes, “This video is sponsored by…” If disclosures are included under the “Show More” cut on YouTube, audiences are less likely to see it, as not all viewers will click to expand to see the full description.
Disclosures are vital to FTC compliance, but brands and influencers must also ensure that all claims made within videos are truthful and can be backed up. The FTC is responsible for safeguarding consumers against deceptive advertising, and while we often talk about that idea in the context of disclosures, false claims are a major part of deceptive advertising, too.
Video creators must be sure that whatever claims they make within videos are based on truth and fact. They should feel empowered to include opinions, but in talking about tangibles, claims related to quality, durability, results, and performance should be limited to factual, provable statements.
YouTube’s paid promotion tag is a step towards standardizing the disclosure of sponsored content across the platform. It signals YouTube’s shift towards encouraging transparency and FTC compliance amongst its users.
However, the FTC’s recent disclosure guideline updates make it clear that using YouTube’s built-in paid promotion tag alone is not sufficient. Similarly, Facebook and Instagram’s paid partnership tags are not considered adequate disclosure by the FTC.
It’s evident that the industry has a long way to go before acceptable disclosure options become standardized. There is a slew of ways to disclose sponsored content, but confusion around appropriate disclosure practices runs rampant, and the FTC’s rejection of YouTube, Facebook, and Instagram’s built-in disclosure features only heightens this confusion.
Social media platforms and the FTC need to bridge the compliance gap. Only time will tell whether platforms can develop improved disclosure tools that fully satisfy FTC guidelines.