How Does the FTC 2015 Update Impact Native Advertising and Influencer Marketing?

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[Estimated reading time: 4 minutes]

For the first time since 2009, and made public in 2010, the Federal Trade Commission (FTC) has updated its What People Are Asking” page. In it, the government answers a key question:

How are advertising disclosures examined by the FTC?

What is the FTC, and how is it relevant to me?

The FTC was implemented as a means of preventing anticompetitive, unfair, and deceptive business practices. As such, the FTC regulates many aspects of commerce in the United States. The rising popularity of influencer marketing and boom in monetized blogging, vlogging, and social media accounts has made it necessary for the FTC to expand its guidelines.

The FTC’s core message is that brands and influencers need to disclose sponsored content.

Influencers and companies should take note, not only because it’s important to represent your brand honestly, but because even the appearance of deceptive practices could draw the FTC’s ire, and cause lasting damage to your image.

ftc influencer marketing

What does the FTC’s guidelines refer to?

The FTC’s core message remains the same: ads and testimonials should be truthful. The web has changed drastically since 2009, which is the last time that the FTC made changes to its guidelines for endorsements and testimonials. Before 2009, there were no major changes to these FTC guidelines in over 30 years!
These amended FTC endorsement guides now applies to all media, regardless of its form, which includes social media. The guidelines even apply to web-based mediums that have not yet been developed.

What does it mean for influencer marketing campaigns?

The FTC update covers many elements of endorsements, including customer comments, reviews, testimonials and employee advocacy (all should disclose affiliation or sponsorship). The update also covers key aspects of influencer marketing, which includes native ads, advertorials, and affiliate marketing.
The idea pressed by the FTC is that “followers need to be aware of the relationship between the influencer and the brand”
When in doubt, disclose. Unless you are Michael Jordan talking about Nike, or Kanye West talking about Adidas, disclose your relationship. This covers everybody– including celebrity endorsements.

Here are are some practical implications for social media:

  1. All social media posts must be disclosed: “clear and conspicuous.” This disclosure standard includes Twitter. There is no excuse for limited space – hashtags like #ad, #sponsored, or #promotion give your audience a clear message.
  2. Video or live streaming sponsorship must be disclosed in writing somewhere in the video, verbally at the beginning of the video, and several times throughout, if the video is long. A simple text notification is not sufficient disclosure. This is especially important for video game live streaming on sites like twitch.tv that recieve new viewers throughout their broadcast.
  3. Advertisers shouldn’t encourage endorsements that cannot be disclosed, like asking a key influencer to like a brand’s Facebook update, Instagram, or Twitter post.
  4. Social contests must be easily understood, easy to read (no sneaky fonts or white on white), and the poster must clearly disclose their relationship with the company. Saying “Company X gave me a sneak peek” does not disclose sponsorship, but saying “Company X gave me a product to try” more directly indicates collaboration.

What does it mean for Advertisers?

This FTC update signifies huge shift in sponsorship responsibility. It is now the advertiser’s responsibility to enforce compliance for the influencers they work with. There is increased burden on the advertiser to prove that they did everything in their power to enforce disclosure guidelines. This also means that advertisers must be especially vigilant when working with a service provider (or better yet, an FTC compliant tech powered influencer marketing solution).
It is more important than ever to ensure that you have have written proof that you instructed influencers or influencer marketing provider to enforce FTC compliance rules. You must also demonstrate that you did everything in your power to keep your brand FTC compliant.

What does Upfluence do to enforce the FTC update? (And protect its clients)

We’ve always been a huge advocate of playing by the rules – both local legal regulations (depending on the country of the advertiser and/or the influencer) and Google’s rules, like its directive to use nofollow links to prevent worthless link-building.

We choose this Victorinox sponsored post written by A Blog to Watch as a perfect example of how to comply with the FTC’s requirements:

Screen Shot 2016-05-23 at 15.28.38

A good example of a FTC compliant sponsored post

As such, Upfluence has implemented a number of protocols that ensure 100% compliance and limit risk. They include the following:

  1. Every campaign brief contains the requirement to comply to FTC rules, including a link to the latest update.
  2. Our management software Publishr automatically inserts a fully compliant disclosure into pre-publication articles (depending on the country and language of the campaign) and Google-compliant nofollow links.
  3. Payment is withheld from Influencers that publish non-compliant content until the article is edited to respect FTC requirements. We find that this is a strong incentive.
  4. All influencers agree to Our Terms and Conditions, which clearly state that they understand and will adhere to local regulations.

Regardless of your target market, Upfluence has you covered – from legal regulations to Influencer implementation.

Conclusions

It is important for advertisers to adapt now! Don’t wait until you receive a complaint for being just a little bit too vague – take proactive measures now. As web media adapts, so will compliance updates. Further changes will likely affect short-lived content like SnapChat, fake social media activity, and content that cannot be endorsed. The internet as a whole is still largely unregulated, so it is vital for the consumer that advertisers properly represent endorsements and sponsorships for what they are.

These new FTC regulations bring awareness to native ads and influencers online. This set increased disclosure regulations does NOT reduce the reach and engagement of publications, either on blogs or on social. So don’t see it as a threat.  It’s simply an evolution of the influencer marketing environment.

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