Commission aims to enhance disclosures in social media endorsements.
After reviewing various Instagram posts by celebrities, athletes, and alternative influencers, Federal Trade
Commission employees recently
sent out over 90 letters reminding influencers
and marketers that influencers should clearly
and conspicuously disclose
their relationships to brands when promoting
or endorsing merchandise through
social media.
The letters were informed by petitions filed by Public citizen and attached organizations regarding influencer advertising
on Instagram, and Instagram posts reviewed by FTC employees.
They mark the first time
that Federal Trade Commission workers has reached out directly to educate social media
influencers themselves.
The FTC’s Endorsement Guides give that if there’s a “material connection”
between an endorser
and an advertiser –
in other words,
a connection which may have an effect on the
weight or credibility that customers give the endorsement – that
connection should be
clearly and conspicuously disclosed,
unless it’s already
clear from the context of the communication. A material connection might be a business or family relationship, financial payment, or the gift of
a free product. Significantly,
the Endorsement Guides apply to both marketers
and endorsers.
In addition to providing background data on when and how marketers and influencers should disclose a material connection in a commercial, the letters each addressed one point specific
to Instagram posts — consumers viewing
Instagram posts on mobile devices usually see only the first 3 lines
of an extended post
unless they click “more,” which many might not do. The staff’s
letters informed recipients
that when creating endorsements on
Instagram, they should disclose
any material connection above the “more” button.
The letters additionally noted that when multiple tags, hashtags, or links are used,
readers may just skip over them, particularly when they seem at the end of a long post – which means that a disclosure placed in such a
string isn’t probably to
be conspicuous.
Some of the letters addressed particular disclosures
that aren’t sufficiently
clear, remarking that many customers won’t understand a disclosure like “#sp,” “Thanks
[Brand],” or “#partner” in an Instagram
post to mean that the post is sponsored.
The staff’s letters were sent in response to a
sample of Instagram posts creating endorsements
or referencing brands. In sending the
letters, the staff didn’t predetermine in every instance whether the brand mention was in truth sponsored, as opposed to an organic mention.
In addition to the Endorsement Guides, the FTC has previously addressed the requirement for endorsers to adequately disclose connections
to brands through law enforcement actions and the staff’s business
education efforts.
The workers additionally issued FTC’s Endorsement Guides: What people are Asking, an informal business guidance document that answers commonly asked questions. The staff’s letters to endorsers and brands enclosed copies of both guidance documents.
The FTC isn’t publicly releasing the letters or the names of the recipients at this time.