FTC Brand Guidelines: What You Need to Know Today (And Avoid Legal Trouble!)

FTC Shaking hands over a contract

The Internet has been a liberating medium that, in most cases, takes away the shackles of traditional advertising content and allows brands to engage with consumers freely. This isn’t entirely true, though. The Financial Trade Commission, or FTC, has regulations in place specifically in place that require brands and influencers alike to follow specific guidelines while advertising online. The aim of these guidelines is simple – not to deceive consumers and staying on the right side of the law! 

This blog will look at how these FTC regulations come into play for brands who indulge in influencer and social media marketing.

Relationship Between Brands And Influencers

Let’s start at the beginning. Why do brands collaborate with influencers? The simple reason being they would like the influencers’ fans to become their fans as well. Instead of manually going through customer identification and then customer acquisition, brands would instead reach a large catchment of these fans that follow a particular influencer. In such collaborations, brands and influencers must disclose their posts stating that it is a paid partnership. While this phenomenon might feel fairly new, influencer marketing has a rich history.

Why The FTC Guidelines?

To put it in its simplest form – the FTC wants brands and influencers to maintain transparency at every step of the collaboration and disclose the relevant details of the partnership. Violating these guidelines could lead to fines, penalties, and extremely high legal fees. The guidelines draw a clear line in the sand between organic posts and posts endorsing a product or service. The body claims that the issue isn’t influencers posting their interests to earn extra money, but big brands are laundering advertising by paying an influencer for a false endorsement.

Types Of Ads

1. Affiliate marketing

Affiliate ads are posts on social media that advertise the brand and contain a hyperlink that leads to a landing page or a discount code. These make them secondary ads, and the advertiser gets paid per click. These fall under the purview of the FTC guidelines and need to have proper disclosures with every post. Whether the entire post is advertising a brand or just part of it, it is imperative to disclose this as a paid partnership upfront.

2. Advertorial

When a brand collaborates with an influencer to create content, and the said content gets posted, it counts as an ad for the brand. The mere mention or display of the brand means that the post ceases to be the influencer’s personal opinion legally. These, again, under the FTC guidelines, need to be disclosed. This is applicable whether or not the brand had editorial control over the content and merely issued payment for the partnership.

What Are ‘payment’ & ‘control’?

The payment is the monetary relationship the brand has with the influencer. When cash exchanges hands, physically or digitally, a paid partnership has been initiated between both parties. This allows the brand to now grow by leveraging the influencer’s reach. This includes money, samples, gifts, services, and other favors that might qualify for payment. It also includes any commercial relationship established between the two parties, like a brand ambassadorship.

Based on the agreement signed with an influencer, control over the content gets established. This agreement refers to what the content has to say and includes key phrases, taglines, or campaign-related hashtags. The agreement is not merely restricted to words and also includes creative direction in terms of the visuals displayed. The control also extends to instructions that pertain to the number of posts and times of posting. Contractually, this control also includes the final approval over the content and the changes needed.   

There are several permutations of what counts as an ad in terms of payment and control. There might be situations where the brand makes a payment but retains control. The brand could also hand over both payment and control to the collaborator. Both, technically, qualify as ads for the brand. Although it is highly recommended, the influencer might not get penalized if they don’t have control and don’t disclose content as an ad.

What To Disclose About The Partnership?

While most of the disclosing needs to be done by the influencer as they post the content, brands must keep close tabs on this to safeguard the interests of both parties. The main reason why a brand might not want to disclose the content as a paid ad is out of the fear that the audience may perceive it as inauthentic. While this does make sense, in theory, there is no correlation between disclosing an ad and its engagement. This ‘audience perception’ is precisely why the FTC encourages disclosing the partnership – maintaining trust among all parties involved.

When To Disclose The Partnership?

Brands need to ensure that any post from their account or an influencer’s account needs to disclose if it mentions or shows the brand in any capacity. To be on the safer side, whether the exchange between the parties is monetary or otherwise should be done. This disclosure includes personal relationships as well. Neither the brand nor the influencer should assume that the users know about the partnership between them.

How To Disclose The Partnership?

To avoid any confusion, make the disclosure impossible to miss. It’s better to have it upfront in plain sight rather than burying it deep in hashtags. Instead of undermining the relationship, both brands and influencers should proudly proclaim their partnership, thereby taking away any risks. One key point to remember is that while a mention of the partnership in the descriptions is enough for images, for videos, you’d rather have it mentioned audibly as well. Also, every single claim mentioned in the content should be actionable and authentic, otherwise, it opens you to further liabilities.

Other Requirements (Some Key Points To Keep In Mind)

  • Influencers shouldn’t make claims about products they haven’t used.
  • The opinions shared need to be accurate as far as possible.
  • Science and health-related claims are tricky and would need to be proven. Hence, it is best to stay away from such claims.

Actionable Steps To Follow:

1. Be aware of all FTC guidelines

The FTC guidelines are clear and specific enough to adhere to. Having paid someone to endorse your brand, it is non-negotiable that they disclose this. It is recommended that brands make influencers share the partnership claim upfront with hashtags such as #sponsored, #paid, or #ad. It is illegal to make influencers talk about a product they haven’t personally tried. If that is the demand, share samples with them to use and experience.

2. Use simple and clear language

Brands need to keep tabs on the language their partners use, as it should be obvious that the post is a paid partnership. Simple statements like “this partnership were paid for by brand X” or “brand X shared their products with me” are enough to comply with the FTC guidelines. Statements like “in collaboration” might come off as too vague and ambiguous.

3. Take advantage of tools and platforms

Instead of taking the effort of typing the disclosures out, platforms like Instagram already have a “Paid Partnership with..” tag built into their system. Similarly, YouTube allows the video creator to add disclosures in text from the video manager settings. These readily available disclosures already comply with the guidelines and are safe to use.

4. Ensure that influencers comply

Instead of going through the tedious task of explaining all these points to the influencers, brands can send them a soft copy of the FTC guidelines to confirm that they have read and agree with them. Assign an associate within the brand the task of manually keeping tabs on every communication going out from either side. As the brand, you are well within your rights to point it out if they haven’t complied with any necessary norms.

While influencer marketing is a great way to boost engagement, leads, and sales, the FTC guidelines merely ensure that this is carried out in a compliant manner to protect the safety of users. While it might not seem like a big deal, dealing with the legal battles associated with non-compliance is a tremendous waste of time and resources. With large parts of the Internet intentionally misrepresenting facts, brands need to ensure they comply with the FTC and safeguard themselves.

Follow these best practices and use these ideas to create influencer content for your brand. If you’ve got any further questions, we are happy to help you. At atisfyreach, we provide services that help brands establish a strong presence across social media platforms, and connect them with influencers. Get in touch, and let us help you build a true connection with your audience.

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