What Does the FTC Cracking Down on Influencer Posts Mean for Your Business?
You’re probably used to seeing (and hiring!) digital influencers who rave about products on social media – whether it’s their favorite skincare mask, protein powder or pet food subscription box. Consumers look to these ambassadors to know what products they should trust. And while those of us in-the-know recognize these posts as a little thing called Influencer Marketing, the U.S. Federal Trade Commission is cracking down on brand-sponsored, ‘deceptive endorsements’ on social media, hoping to make that fact much clearer to the general populace.
Over 300,000 posts found on Instagram in July featured the hashtags, #ad, #sp, and #sponsored – an increase of about 120,000 from 2015, according to Influencer Marketing company, Captiv8. However, the FTC says that these hashtags, which are commonly used to indicate when someone is being paid to promote a product, just aren’t enough. As Bloomberg reports, Michael Ostheimer, a deputy in the FTC’s Ad Practices Division says the agency will be putting much more pressure on advertisers to make sure they are in compliance. “We’ve been interested in deceptive endorsements for decades and this is a new way in which they are appearing,” Ostheimer says. “We believe consumers put stock in endorsements and we want to make sure they are not being deceived.”
So what makes a deceptive endorsement? According to the FTC, it’s pretty simple. Not being up front about your relationship with an influencer (or vice versa) pretty much sums it up. But as easy of a problem as that sounds to remedy, the lines get more than a little blurry when it comes to social media platforms like Snapchat and Twitter, where there is only so much time (and characters) at one’s disposal.
The main cause for concern amongst brands and influencers alike seems to stem from the fear that sponsored posts will seem less authentic – influencers’ opinions will hold much less stock if consumers think they’ve been spoon-fed every single thing they’re saying.
But the FTC says, “Consumers have the right to know if reviewers are providing their own opinions or paid sales pitches,” remarks FTC consumer protection bureau director Jessica Rich. As such, the they’re seriously cracking, making it clear what the expectations are. They’ve already made an example of several companies. For example:
- Earlier this summer, Warner Bros. Home Entertainment Inc. settled with the FTC over charges claiming they had deceived customers by paying internet influencers to promote the video game Middle-Earth: Shadow of Mordor with positive reviews. Their mistake? Failing to disclose that these influencers were not only paid but told exactly how to promote their product. When it comes to video content, the FTC wants disclosure in the form of a statement made out loud, or displayed on screen.
- March 2016 saw the FTC issuing a complaint against Lord & Taylor after the apparel retailer paid fashion influencers to create posts about one of its dresses on Instagram, but didn’t disclose that they’d paid them and had given them the dresses for free. According to the FTC, any compensation, including free products, should have been disclosed.
In addition to pursuing legal action against advertisers for misconduct, the FTC has been spreading the word via webinars, speeches and trade associations. “We hope by bringing these cases [to light] that we not only stop the marketer and influencer who didn’t have adequate disclosures previously, but also get the message out that other companies should have clear and conspicuous disclosures,” says Ostheimer.
If all of this is making you think about tightening the reign on your influencer program… it should. While it seems counterproductive to have an influencer start off a sponsored post essentially saying, “Hi! I’ve been paid to say this!” it’s worth it if it the alternative is going head-to-head with the FTC. And who knows? Influencer marketing is fairly new and evolving everyday! Soon, the very platforms used to make it happen may have built-in regulations that keep both the FTC and the consumer happy.
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