Editor’s Note: This piece is occasionally updated for accuracy and to reflect changes in the law.
You’re finally getting paid to talk about a dream brand and have the perfect concept to shoot for your upcoming brand campaign. This sounds simple until you think about the dreaded legal requirements. Acknowledging FTC guidelines as influencers is one thing, but effectively implementing them is another.
Let’s ditch the overwhelm that comes with searching “FTC guidelines for influencers” and other internet search spirals and get an actual legal perspective from our go-to legal expert, Veronica Ramirez, Esq. who will give us a quick breakdown of what you need to know about the FTC’s advertising guidelines.
What are FTC guidelines, and why do they matter?
The Federal Trade Commission is a United States consumer protection agency tasked with “protecting the public from deceptive or unfair business practices and unfair methods of competition.” The FTC created a set of regulations specifically designed for advertisers and influencers to follow when creating content online, known as the “Endorsement Guides.” These regulations outline the steps influencers and advertisers need to take to help their audience distinguish that what they see isn’t a run-of-the-mill organic post.
Please remember that other laws and regulations apply when creating sponsored content. Think of these regulations as the baseline for all sorts of sponsored content. Depending on the industry, different rules or laws may apply, like that time Kim Kardashian paid $1 million to the SEC for her crypto ad. If you have questions about what other laws to keep in mind, please consult an attorney.
Three fundamental truths about FTC guidelines
Before diving in, let’s acknowledge some truths about the FTC’s regulations:
- They don’t consider how your content will perform when implementing the requirements.
- They don’t account for creative briefs
- They don’t incorporate or include social media’s latest developments or tools available (the legal field is very slow).
What are the FTC requirements for influencers?
Here’s an abridged checklist of what the FTC requires of Influencers:
- Disclose your “material connection” in your content*
- Only endorse products or services you used
- Be honest about your opinions in your sponsored content
- Make sure that whatever claims you’re making about a product or service are substantially supported
Since most of these are self-explanatory, we will focus on the first point. If you need someone to explain why you can’t legally lie about using products or how they work, the FTC is the least of your worries. But the idea of a material connection can be complicated, so let’s explore it.
What does disclosing your “material connection” mean in your content?
The FTC regulations require that influencers disclose their “material connection conspicuously.” Think of a material connection as the reason or motivation behind posting about a brand’s products or services in the first place. Did you just feel like posting about this brand’s products because you bought and liked it? Or do you have some connection or something else to gain by posting?
Apart from paid collaborations, where you sign that contract and get paid to post specific deliverables about their products, there are also not-so-obvious ways a “material connection” could well…materialize. Here’s a list of material connections to be mindful of:
- Personal/ family/ employment relationships
- Financial relationships. These include paid collaborations, affiliate partnerships, receiving gifted products, free perks, or discounted products or services.
- This applies even if you were not asked to mention a product
What are disclosures, and how are they “conspicuous”?
Once you’ve identified your material connection, that triggers a duty to disclose that in your content. Disclosure is that “call out” you incorporate in certain places within your content to make it super clear to your audience that there is a reason they’re seeing this content (i.e. that material connection). The FTC requires that influencers and advertisers ensure that people will understand and know the disclosure—it needs to be in a place that’s “hard to miss.” Some standard disclosures include:
- #ad, AD [followed by caption]
- Gifted by [brand name]”– when posting about gifted products, products received in PR, unboxings etc.
- #[brand]partner #[brand]ambassador– when posting sponsored content
- #[brand]affiliate, *eligible for commission – when posting about products that are connected to some affiliate link and are eligible for a commission
- “Thanks [brand] for the free product”
- “If you use the link below, I earn a small commission”
- “Thank [brand] for sponsoring this video”
- “This post is sponsored by [brand], but all opinions are my own.”
Please note that a platform’s paid sponsored tool is not a replacement under the FTC’s current guidelines.
A platform’s requirement to use the paid partner tool for sponsored content is essentially a contractual obligation (because most, if not all, platform terms and conditions require influencers to abide by this to maintain access to the platform), which is separate from the FTC’s influencer guidelines.
Where (and when) should you include your FTC disclosures?
Most influencers are aware of these disclosures but may not understand where or when they need to include them within the content to make sure it’s “hard to miss.”
For Stories Content – The FTC requires influencers to superimpose a disclosure in a visible place that allows followers ample time to understand what they’re seeing is an ad.
For Video Content – Influencers should superimpose a disclosure within the video and within the video’s description or caption. Ideally, Influencers should be making a verbal disclosure within the video, which is common for most long-form influencers.
For Live Streamers – we’re seeing more and more brands leverage live streams to shop products. Influencers hosting sponsored live streams should disclose periodically so viewers who join at different times are aware that there is a material connection involved (this usually happens with live shopping or product demos).
For static photo content – Include the appropriate disclosure within the caption “above the fold.” Followers shouldn’t have to select “more” or find the disclosure buried in a group of hashtags.
For Bloggers – You must include a disclosure statement at the top of your post. Yes, it will make your SEO imperfect, but it will protect you from legal liability.
Do all influencers abide by these requirements? No. For example, you don’t often see a disclosure when influencers post about Amazon storefront items. Do some influencers rely on a platform’s paid partnership tool for their sponsored content? Yes. That’s probably because they don’t know better or believe they won’t get caught. But now you know better, right?
What are the rules for influencers?
FTC guidelines for advertising apply to brands, agencies (where applicable), and influencers. If it turns out you played some part in creating a “deceptive advertisement,” then you could be subject to enforcement action by the FTC, including a hefty fine.
How hefty? You could face up to $50,120 as of 2023 per violation. Even though a brand or an agency may have some role in reviewing content (some even go as far as providing a guide for FTC compliance), make sure you have those requirements dialed in. This review process in no way excuses you from liability.
Do influencers have to register as a business?
Do you have to? No, but you should if you want to protect your personal assets from your business liabilities.
Editors Note: This
The content discussed in this article is for educational purposes only and not for the purpose of providing legal advice. Use of and access to this article does not create an attorney-client relationship between Curator Counsel PLLC and you. The material and information presented should not be relied upon or construed as professional advice. You should not take action based upon this information without consulting legal counsel.