By D. John Hendrickson
As you probably know by now, in April the Federal Trade Commission signaled its heightened concern with social media influencer campaigns that fail to disclose the existence of a business or family relationship between the influencer and the advertiser.
As a clear indication of more serious enforcement to come, the Commission sent over 90 letters to marketers – including Adidas, Johnson & Johnson, and Dunkin’ Brands Group, Inc. – and their influencers (including celebrities like Heidi Klum), advising them that their current practices violate the FTC’s Endorsement Guides.
Unlike traditional advertising where consumers expect for there to be a relationship between celebrities and the companies whose products they describe, social media posts are different and may be perceived by the public as personal messages from the influencers and not paid product endorsements.
Under the Endorsement Guides, the duty to disclose any “material connection” is the responsibility of the marketer, its ad agency (if any) and the influencer – who may be a celebrity, athlete, brand ambassador or other influencer. And it’s important to keep in mind that both the marketer and its ad agency are potentially liable for the conduct of their influencers.
With all of this in mind, here are some steps you can take now to help comply with the Endorsement Guides:
1. If there is any “material connection” between the marketer and the influencer, make sure to disclose it. This includes a traditional paid endorsement, as well as the receipt by an influencer of free products or other gifts. It also includes the mere existence of a business or family relationship between the marketer and the influencer. You don’t need to explain the details of the compensation or the relationship. It’s the existence of the material connection that needs to be disclosed.
2. The disclosure must be “clear and conspicuous.” Use simple, unambiguous language, and make it easy for the follower to see it. This can be accomplished within the content of the message itself, or even with hashtags such as “#ad” or “#sponsored” at the end of a tweet or status update. But don’t bury the disclosure at the end of a long string of hashtags.
3. On Instagram, disclosure of the connection must be made above the “more” button. This is because consumers checking their Instagram stream on a mobile device will usually only be able to see the first three lines of a post unless they click “more.”
4. If you are the marketer, have a social media policy. This will inform your influencers about their “truth-in-advertising” responsibilities, including their obligation to disclose their relationship with you and how to make that disclosure.
5. The influencer should expressly agree to the terms of the social media policy. You can have the influencer sign a copy of the policy itself, or you can include it as an exhibit to your agreement with the influencer and include language whereby the influencer expressly agrees to its terms.
6. Provide initial training about the policy to the influencer. You may not get the major celebrity or athlete to attend a training session, but it should be mandatory for everyone else.
7. Monitor the influencer’s online conduct and enforce your policy. The marketer and its agency can be held legally responsible for the conduct of the influencer. If you see violations, you should immediately advise the influencer of the issue and determine how, if possible, to correct the violation within the influencer’s future posts. In addition, consider further training for the influencer and, in some cases, termination (but only with legal advice). Monitoring and enforcement of your social media policy is one of the best things you can do to avoid a regulatory challenge.
We’ll continue to stay on top of this issue and will let you know if there are any significant developments in the coming months.
Legal disclaimer: This article is not intended to constitute legal advice or to create an attorney-client relationship. We trust you knew this anyway.