By: Linda L. Goodman
Be Prepared for an FTC Crackdown on Social Media Influencer Review Marketing!
Your product is getting great reviews! Awesome! Unless of course you forgot to mention that you are paying or sharing the revenue with the person who is giving the review.
Adequate disclosure to consumers and compliance with the FTC guidelines includes:
- A disclosure of a material connection between a brand and an endorser must be clear and conspicuous.
- #ad at the beginning of a post is best practice (“sponsored” or “promotion”) is at least meeting the minimum standard.
- Burying “#ad” or “sponsored” or “promotion” at the end of the post is guaranteed not to meet any standard.
- Superimpose the disclosure over the images posted on SnapChat is best practice. If the imbedding is at the bottom in small print, you have no defense.
- For video ads, make sure the disclosure stays on the screen long enough for consumers to read it or post it directly under the video (which means above the fold).
- Identify what is being paid – free product, revenue, or anything given in exchange for your posting is required to be disclosed.
- For those looking for an endorser – a common sense approach – make sure it is #1 a real person, #2 they have used the product #4 they are accurately describing their experience with the product and #4 You have a signed agreement documenting #1 through #3 and authorizing use of the review.
Why go to all that hassle?
Two years ago, the FTC send out 90 warning letters to social media influences about the requirements to clearly and conspicuously disclose to consumers their relationships with brands while promoting the brand on any social network platform. Initially they fell into line…and then fell off the line.
Recently, Senator Blumenthal (they guy who lied about his Vietnam service record – yeah him) decided to inform the FTC of “The dangers of detox teas & their deceptive marketing practices demand federal action. FTC must investigate these products’ misleading, celebrity-backed predatory claims that make false promises of “healthy” weight loss to young adults.” In the letter he specifically points to misleading marketing tactics on social media platforms, targeting primarily young adults (and young women in particular). Not surprising, he aims the majority of his complaints at the Instagram idol Kim Kardashian who earned up to “six figure sums” for a single social media post promoting detox tea products. Notably, he claims the endorsers personally use the products or the alleged health risks associated with the teas were not mentioned. With a Senator’s demands, the FTC is likely to begin another crackdown, so prepare now.
How to Prepare?
The best way to satisfy the FTC is to look at what they demanded in the past. For example, in the FTC’s action against Lord & Taylor the charges were settled by consent order that prohibited Lord &Taylor from misrepresenting that any social media endorsers are ordinary consumers and affirmatively disclose any material connection between the brand and the endorsers. Notably, it also required Lord & Taylor to put in place a monitoring program to review endorsement campaigns for compliance.
Warner Brothers was also placed under FTC injunction and resulting inspection in connection with its use of prominent influencers, including PewDiePie, for sponsored gameplay videos to promote the Middle Earth: Shadow of Mordor game. Warner Brothers who contractually required the influencers to place sponsorship disclosures in the description box appearing below the video were informed by the FTC the disclosures were not sufficiently conspicuous because the disclosures appeared “below the fold,” visible only if consumers clicked on a “Show More” link in the description box. In addition, influencers posting YouTube videos on Facebook or Twitter, failed to include the “Show More” button at all resulting in little likelihood that consumers would see the disclosures.
Get Ready! FTC Crackdown coming
Social media ad spend is reportedly on track to overtake all other forms of advertising, including TV. Thus, with a Senator’s push the likelihood of increased scrutiny from the FTC to ensure upfront, clear disclosures of any paid content by influencers is nearly a guaranteed certainty.
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This article is a publication of The Goodman Law Firm and is intended to provide information on recent legal developments. This article does not create an attorney-client relationship, nor should it be construed as legal advice or an opinion on specific situations. This may constitute “Attorney Advertising” under the Rules of Professional Conduct and under the law of other jurisdictions.
Linda L. Goodman is the founder of The Goodman Law Firm, concentrating its practice in internet business and law. Her firm’s clients include Advertisers, Affiliates, Affiliate Networks, and ISP’s.
© 2019 TGLF, A.P.C.