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Legal Rules for Influencers on Social Media

Every day I see posts on Instagram and other sites that are in violation of the legal rules for social media influencers.

“Influencers” are, typically, people who are either well-known celebrities (just to keep it interesting, I’m going to avoid using the proper noun that begins with “Kar” and ends with “dashian”) or people who may not be known to the general public, but who have a significant online following related to a certain topic. Common examples include fitness, fashion, and consumer goods. Sometimes they are referred to as “Brand Ambassadors” or something other than “Influencers,” but the effect is the same. They often receive money or free/discounted goods in exchange for posting about the goods in their online feeds. And very often they don’t properly disclose the nature of the relationship with whoever supplied those goods.

While it might seem like it’s OK to be ignorant of the law (or to ignore it) if everyone else is doing it, the U.S. Federal Trade Commission (FTC) has recently signaled that they are prepared to go after people who don’t properly disclose when a post is an advertisement. They’ve also clarified how those rules apply to Instagram.

An FTC press release stated that they have recently “sent out more than 90 letters reminding influencers and marketers that influencers should clearly and conspicuously disclose their relationships to brands when promoting or endorsing products through social media.”

So What Are the Rules for Social Media Influencers?

Regular readers will know that I’ve touched on this topic before (see this post about celebrity endorsements and this one about endorsements on podcasts.)

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To keep it simple, in this post I’m going to use the word “endorsement” to include any type of endorsement, testimonial, or affiliate arrangement. The FTC has the power to investigate and prevent deceptive trade practices. The FTC regulates advertising, so they set the rules that apply to online influencers and brands that work with them.

What if you don’t have a formal written contract? If an influencer receives something for free – or at a discount – in exchange for a review or endorsement, they need to disclose that information. Even if it’s not a straight up quid pro quo, these rules apply.

The FTC Guides

Influencers and those who work with them regularly should take the time to read the rules and guidelines published by the FTC:

The current (as of this writing) version of the FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising can be found here.

The FTC’s ebook .com Disclosures: How to Make Effective Disclosures in Digital Advertising can be found here.

Finally, the FTC also has an FAQ page called Endorsement Guides.

5 Simple Rules

For those who just want a quick reminder, here are some basic guidelines you want to follow. And by “you,” I mean either the influencer or the brand that’s working with the influencer.

  1. Be Honest
  2. If You Claim to Be an Expert, Actually Be an Expert
  3. It’s About the Relationship (Between the Celebrity Endorser and the Company)
  4. You Can’t Hide or Bury the Disclosure
  5. Fancy Legal Jargon is Not Your Friend

The bottom line is that someone who’s endorsing a product, whether they received it for free, at a discount, or via some other sort of contract, must disclose the nature of that relationship.

What are the consequences of not disclosing?

Once the Commission has promulgated a trade regulation rule, anyone who violates the rule “with actual knowledge or knowledge fairly implied on the basis of objective circumstances that such act is unfair or deceptive and is prohibited by such rule” is liable for civil penalties of up to $11,000 per violation.

No More “More”

The FTC clarified its position regarding some aspects of Instagram endorsements. They noted that…

…consumers viewing Instagram posts on mobile devices typically see only the first three lines of a longer post unless they click “more,” which many may not do. The staff’s letters informed recipients that when making endorsements on Instagram, they should disclose any material connection above the “more” button.

The letters also noted that when multiple tags, hashtags, or links are used, readers may just skip over them, especially when they appear at the end of a long post – meaning that a disclosure placed in such a string is not likely to be conspicuous.

Some of the letters addressed particular disclosures that are not sufficiently clear, pointing out that many consumers will not understand a disclosure like “#sp,” “Thanks [Brand],” or “#partner” in an Instagram post to mean that the post is sponsored.

What to Do

Whether you’re an influencer,  always include words like “#Ad,” “Sponsored,” “Promotion,” or “Paid ad” in the post. Every time. On every platform. And do so in a way that stands out, #notinthemiddle #ofalong #seriesofhashtags #ad #thatnobody #actuallyreads.

Also, as the FTC indicated, saying “Thanks, Nike” when you post about your cool new sneakers doesn’t cut it.

These disclosures should be clear and conspicuous – which means they have to appear early in the text so someone who’s viewing the post on mobile will see the disclosure before the “… more” pops up. For Instagram that means the disclosure must appear within about the first 120 characters. For other social media platforms, this will vary.

What If It’s Not a Text-Based Platform? I’m Looking At You, Snapchat.

The same basic guidelines must apply – the disclosure must be clear and conspicuous. You’ll have to adapt your practices to whatever channel you’re posting in.

The Bottom Line

Disclose that it’s an ad or a sponsored post. Do it early. Make sure it’s clear and unambiguous.

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