You struggled with content, you grinded long hours for followers, and it finally paid off – YOU GOT A SPONSOR! Congrats! Now how can you meet your obligation to your sponsors and not get in trouble with the government?
I constantly see influencers do sponsored content incorrectly. Many in the social media space know they should put #ad or #sponsored in their content, but many ignore this and I even had some clients disregard my advice because “no one will care.” Well the Federal Trade Commission (FTC) cares and they are starting to take action against sponsors and influencers who ignore these rules. The FTC is tasked in “protecting consumers and competition by preventing anticompetitive, deceptive, and unfair business practices” and to effectuate this mission they are given the power to bring lawsuits against companies and individuals.
In 2009, the FTC revamped their online endorsement rules, which now guides how influencers can do sponsored content. Over the previous decade the FTC generally went after the advertisers, but in recent years, they have started to target the influencers. This can be seen with the FTC releasing guidelines specifically addressing influencers’ responsibilities. In this post, I will elaborate three of the most common mistakes that can get you in trouble, but I advise all influencers to read the guidelines to safely stay out of the FTC crosshairs.
Properly Disclose Your Relationship with Brands
This is the crux of the problem the FTC have with influencers. If you have any “financial relationship” with the brand then you should disclose it. This includes getting money or products from the advertisers. Yes, that includes those dumb watches, if you are an influencer you know what I’m talking about. In your sponsorship agreement the advertisers might include specific ways for you to disclose this information, but from the brands I worked with, most of them are lacking in instructions to do a proper disclosure.
The FTC is serious about these disclosures. In 2017 the FTC investigated Trevor “TmarTn and Thomas “Syndicate” Cassel in their relationship with a gambling site based on the video game, Counter Strike: Global Offensive. They promoted the site without disclosure and paid other influencers to endorse the site with no disclosure. This resulted in a settlement order for TmarTn and Syndicate and other influencers received warnings from the FTC for their conduct.
Many influencers know to disclose they should put #ad or #sponsored in their content, but many don’t understand that it needs to be conspicuous. That means the disclosure should be a part of the content and the average consumer can easily notice it. The disclosure cannot be hidden under the “more” or “…” button and it should not be in a group of other hashtags. Another common misconception is if the disclosure is already included in a picture post on Instagram, then it does not need to be included in Stories. That is untrue. If you are endorsing in IG Stories or Snapchat, it is considered a separate endorsement than your other posts and should have a superimposed notification of its endorsement nature.
Recently, the advertising watchdog group, Truth In Advertising filed a complaint with the FTC to investigate into Youtube top channel, “Ryan’s World” (Formerly “Ryan ToysReview”). Though the channel provided disclosure to endorsements, the complaint argues that the placement and method of these disclosures were not enough to meet the legal standard. Regardless if these claims are substantiated or not, it shows that not only do you need to put disclosures in your content, but also do it the right way.
Do Not Make Unsubstantiated Claims
This might also seem obvious, don’t lie. However, when trying to be creative and engaging to your followers, sometime what you say might not be intended to be a false statement, but the law might see it another way. A common mistake is to make unsubstantiated claims or omissions that directly or imply provable facts. Basically, unless the advertiser provides evidence for it, your endorsement should stay within your own experience with the product.
This rule applies to all sorts of endorsements, but I see the biggest violations when influencers promote food or health products. You might have seen your favorite influencers advertise those “diet” teas on Instagram, claiming you can lose weight in a month by drinking the tea. Recently, the FTC cracked down on those posts by investigating Teami, a diet tea company, and influencers involved in their social media program. The FTC charged Teami with deceptive health claims because some of their influencers claimed the tea helped with weight loss, treats cancer, heart disease, and other health benefits without any scientific evidence of it doing so. Though the FTC focused on Teami, it did mention influencers are also liable for their endorsements.
On the other hand, the law does allow for creative endorsements with what is known as “puffery.” Puffery are subjective claim that cannot be proven to be true or false. This includes statement of quality like, “top tier,” “world best,” or “high quality.” It also includes hyperbole such as “I feel so good I can lift a car” or “it is so soft it’s like being hugged by a dozen puppies.” Influencers can use these statements to create more colorful endorsement without running afoul with the FTC as long as it doesn’t contain any provable facts.
Do Not Have Lotteries for Products
Generally giveaways are a great way to give back to your communities and attract attention. A lot of brands also provide products for you to giveaway, but many advertisers fail to give guidance on how to properly conduct these without it becoming an illegal lottery. A lottery is an 1) event based on chance, 2) for a prize of value, 3) for consideration.
To have a legitimate giveaway you must remove one of the three elements so that it is not considered a lottery. Typically, the whole point of the giveaway is to…well, give away a prize so element 2 is out of the question. You can remove the chance element by having a contest that involves some sort of skill such as an online scavenger hunt, winning a tournament, or a talent show.
Consideration is where most influencers run into problems. A consideration is any monetary fee or substantial time and/or effort to enter the giveaway. To eliminate this element, you can either not have any kind of fees or have an alternative free way for someone to join. The alternative way must have the same chance as those that paid. Problem generally arises on platforms like Patreon or Twitch, where you can subscribe to the influencer to get a chance to enter a giveaway. However, do note that the industry does not consider a simple “follow” or “like” to enter a giveaway as a substantial consideration. In fact, I would actually encourage influencers to require follows and likes to track engagement.
Final Thoughts
To be an influencer is to build a following and a community. The rules mentioned above are meant to protect the ones following you, and it is not only the legal duty, but an ethical one for the influencer to abide by these rules. Be good to your community and they will be good to you. However, there are times when advertisers might not give you the right guidance or even pressure you into doing certain endorsement activities that might get you into trouble with your followers and the law. At this point it is advisable to contact an attorney. At the very least they can avoid you getting a letter from the FTC and at best, they can save your sponsorship.