Are your influencers complying with FTC rules?

By Adi Menayang contact

- Last updated on GMT

Getty Images / Petrunjela
Getty Images / Petrunjela

Related tags: Marketing, Social media, Ftc

Dietary supplement and functional food endorsements were among the many products that got influencers on the FTC’s naughty list last year.

“We’ve changed media to social media, which allows unprecedented interaction​,” said Lauren Medoff, senior counsel at multi-level marketing supplement company AdvoCare International during her presentation on influencer marketing at the American Conference Institute’s Sixth Annual Legal, Regulatory and Compliance Forum on Dietary Supplements last month.

It took radio 38 years after its inception before it reached 50 million listeners, Medoff said. For television, it was 13 years before 50 million people were able to tune in. For Instagram? It was a mere 1.5 years.  So FTC had to scramble to set up guidelines ensuring best practices exist for the medium.

Globally, social media ad budgets almost doubled to more than $31 billion in just two years.  They stood at $16 billion in 2014, Adweek reported​.

Within the social media advertising space is the growing ‘influencer’ platform—brand endorsements from online personalities—which Adweek said was worth $2 billion in 2017​ and is poised to hit $10 billion by 2020.

For the less social media savvy, here’s a quick overview: Traditional ads usually feature professional models or celebrities, shot by professional videographers and photographers, and have special spots in social media feeds that have built in ‘sponsored content’ disclaimers or similar.

Influencer ads, on the other hand, tend to look like the everyday person’s posts, where the featured personality regularly communicates with his or her followers, blurring the lines between mundane a-peak-into-my-life video snippets and actual paid endorsements—and this is the area which the FTC is increasingly scrutinizing.

#Thanks[Brand] is not enough

In April last year, the agency sent out 90 letters​ to remind influencers and brands to clearly disclose relationships.

Further Reading

Three fundamentals for food, beverage and nutrition firms to benefit from influencer marketing

Major food and drink firms are increasingly incorporating influencer marketing into their advertising mix, but the best results are only achieved when brands move beyond seeing it as a simple cash for content or comments transaction. 

READ MORE

Instagram now has a function for influencers (usually defined as those with 10,000 followers) to disclose whether a post is sponsored or not right under the handle—but this alone is not enough, said Claudia A. Lewis, a partner at Venable LLP who was a co presenter with Medoff at the conference.

She said that the influencers themselves should also say something about being endorsed instead of relying solely on the platform’s built-in disclosure. This includes clearly saying in the caption that it is advertising, or using the hashtag #sponsored.

More discreet hashtags, such as simply saying #Thanks[Brand] or using vague terms like ‘ambassador,’ where it’s unclear if the influencer is paid or is simply an unpaid avid fan, is not enough.

More information on how the FTC regulates influencer marketing can be found on FTC’s Endorsement Guide​.

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