Influencers and the FTC: Disclosure is Key

People don’t like ads anymore. According to Adweek, only 14% of internet users remember the last ad they saw online, and of that, only 8% can recall the company or product shown (and only 2.8% think that the ad was relevant). While at the same time, 92% of those surveyed trust social media influencers more than traditional advertising methods. It’s safe to say the future of advertising rests in the hands of influencers.

Why do people prefer influencers?
People prefer influencers because they feel like a more honest source of information, one that isn’t concerned with making a profit but cares about sharing their opinions with the world. They aren’t getting paid to post, and even if they are, it feels less corporate. They post because they choose to, and their advice might be more relatable to people who live a similar life.

Striking a partnership deal with the right influencer could prove to be a smart move in getting the word out about your brand if done correctly. There are many things to consider when looking into finding a suitable influencer, like how responsive their audience is, what kind of people follow them, and if their style will compliment your brand.

The one thing brands often forget to consider when developing relationships with influencers is disclosure of the endorsement deal. Disclosure is when an audience is made aware that they are being marketed to by an influencer who is getting paid to work with a company. 

Imagine you needed a new pair of shoes for your hiking adventures. You meet someone who tells you all about a set of hiking boots they have and how great they are, listing the incredible features they have and how they have great ankle support. Would that recommendation influence your decision to buy the shoes? It wouldn’t force you, but you would probably consider the suggestion.

Now, what if your hiking buddy worked for the manufacturer of those hiking boots? Would that change the meaning of their recommendation? Of course it would! That’s why the FTC Endorsement Guidelines exist: to ensure endorsements are honest and not misleading in any way.

The repercussions of failing to disclose influencer endorsements range from a letter from the FTC reminding the influencer to clearly and conspicuously disclose their endorsements, or worse, companies can face charges brought by the FTC, like in the recent CSGO Lottery case.

Regulations like these aren’t as much of a problem for traditional advertisements. The FTC isn’t concerned that a television audience won’t realize ads are paid promotions. On a blog, social media page or other similar outlets, however, viewers may not be informed about any such relationships and for that reason, greater disclosure rules are necessary.

As a marketer, ad agency, or public relations person, the FTC will most likely look to you first for a resolution should any conflict arise. You should be ready and anticipate this happening long before it ever does. Our professional advice? Vet influencers on their disclosing habits. Bring it up in the first conversation you have with them, write it into the endorsement contract and consistently hold them accountable. You will not just be doing this to save you and your company’s skin, but you’ll also be doing a service to your fellow consumers.

Ok, so how do I disclose?
In a series of Twitter posts, the FTC released some details on what they consider to be proper disclosures. On Twitter, putting #ad or just “ad” at the beginning of the post will suffice to make sure it stands out to viewers. Using XXPartner, where XX is the brand, will suffice as disclosure in most cases, such as, “Apple just sent me a new iPhone to try out #MacPartner”. Using “Sponsored” will work as well, but not “Ambassador”. The FTC believes ambassador is not definitive enough to convey an endorsement.

A disclosure that is “built-in” to social media platforms will not make an endorsement clear and conspicuous enough on its own to count as a disclosure. Even though Instagram, YouTube and Facebook all have built-in features to display when a post is sponsored or features sponsored content, the FTC doesn’t think it suffices. For platforms that use disappearing images, like Snapchat and Instagram Stories, influencers must superimpose text on the first of a set of pictures and in a way that the viewer can read and understand. Images used to identify a post is sponsored are allowed as long as they are clear, easy to understand, and stand out.

This push for ethical communication, we predict, is only the beginning of a more significant effort by the FTC to protect online consumers from being misled. As a marketing agency in Phoenix, we’ve seen first hand that influencers are often preferred over other forms of advertising, and the trend is only going to continue in that direction. For now, a good rule of thumb to avoiding any problems with the FTC is this: When in doubt, disclose.

Ashley Gojic

Ashley is a Senior Account Executive at Decibel Blue. She holds degrees in Political Science and European History from Arizona State University and considers herself a naturalized Arizonan. When not banging the drum in agency land, Ashley enjoys volunteering at the Arizona Humane Society and spending time with her husband and two super cute Spaniels, Duke and Molly.

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