Advertisers increasingly see social media as a platform to leverage influencers for positive endorsements of their products and services. Nevertheless, the Federal Trade Commission (FTC) has been explicit in asserting that regulations on disclosing material connections also extend to the realm of social media. Recently, the FTC updated its Guidelines on the Use of Endorsements and Testimonials in Advertising to provide clarity and address emerging questions due to advancements in technology, such as computer-generated influencers, and evolving platforms. Over time, the Commission has pursued numerous cases against influencers, agencies, and the companies engaging them.
The utilization of social media for product endorsements typically falls into three categories: (1) providing free products or other incentives to social media influencers; (2) compensating social media influencers to promote their products or services; and/or (3) encouraging employees to discuss products or services on social media platforms. In all these scenarios, transparent disclosure of the relationship between the brand and the social media influencer is paramount.
Here are some points to help guide you:
If you provide free products to social media influencers for reviews, or if you pay them to promote your company or competitors, ensure they disclose the gift or payment. There is no specific phrasing required, but straightforward disclosures are often most effective, such as "X Company provided me with a complimentary product."
The same rule applies to endorsers or celebrities who are compensated for posting or tweeting about your products or services. Hashtags like #ad, #sponsored, and #[BRANDNAME] ambassador are generally effective in indicating that it's an advertisement. The FTC does not consider #spon and #sp adequate. When marketing to children, clarity is especially important.
Disclosure of compensation, gifts, or any connection to a brand must be prominently displayed, ideally at the beginning of a post. It should never be hidden behind a "read more" link. Avoid burying disclosures at the end or amidst a string of hashtags where they might go unnoticed.
Establish a system to regularly remind your employees that they must disclose their affiliation with the company when discussing your products or services on social media. Additionally, all their statements must be truthful and supported.
Encouraging consumers to "like" or "tag" your product may necessitate a disclosure. If a social media platform does not permit disclosures, do not incentivize endorsements on that platform.
Posts made for contests should clearly state that they are part of a sweepstakes or contest. The FTC discourages the use of abbreviations like #sweeps, suggesting that "[BRAND]SWEEPSTAKES" should be used instead.
In videos, disclosures must be included within the video itself, right at the beginning, rather than in the description.
For photo-only platforms, superimpose disclosures directly onto the image to ensure they remain visible when shared.
While social media platforms may offer built-in disclosure features, the FTC advises against assuming they are adequately clear and conspicuous.
Advertisers are accountable for the content posted by their social media influencers. Establishing a clear social media influencer policy, monitoring their posts, and promptly addressing any issues can prevent regulatory complications.
Similarly, if utilizing third parties such as agencies or review platforms for social media campaigns, ensure they comply with disclosure guidelines and monitor their activities accordingly.
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