FTC Advertising Law Compliance

How to Comply with FTC Endorsement Guidelines on Social Media

Resources & Self-Education   |   Sunday, June 11, 2017

Though the Federal Trade Commission (“FTC”) requires clear and conspicuous disclosures of advertising content, including paid reviews and influencer campaigns, as “influencers” are expanding on social media, many businesses are not complying with FTC guidelines.  
 
Expansion of Brand-Sponsored Content

Brand advertising through social media and other online platforms continues to grow, including through sponsored reviews and so-called “native advertising,” which is embedded advertising that matches the format of social media content. The FTC recently sent out more than 90 letters to influencers and marketers reminding them that they must clearly and conspicuously disclose their relationships to brands when promoting or endorsing products through social media.

FTC Guidelines for Endorsements

As an initial matter, the FTC defines an endorsement as an advertising message that consumers are likely to believe reflects the opinions, beliefs, findings, or experiences of someone other than the sponsoring advertiser. This includes situations in which one is paid or gets something of value (e.g., free or discounted merchandise) to endorse a product.

Under FTC rules, disclosures must be truthful and substantiated, be clear and conspicuous, and disclose material connections between the one providing the endorsement and the advertiser.

“Material Connection” Standard

Whether a social media post contains an “endorsement” with a “material connection” typically depends on the circumstances. If the individual is paid or received something of value for an advertising message, there is likely an endorsement that should be disclosed. However, there is an exception for spokespeople clearly promoting a product and for experts.

For example, consider a posted video in which a spokesperson for an advertising drug company purports to speak on behalf of the company and clearly promotes a drug by praising the drug’s ability to deliver fast pain relief. If a significant portion of the viewing public knows the individual is a spokesperson, the statement is likely not an “endorsement” under FTC rules. While there is a grey area in certain situations, generally, the more subtle and less straightforward an endorsement, the more likely consumers will be deceived, and the more likely disclosures are needed.

Disclosure Language to Avoid

FTC rules do not state the exact language required for disclosures; however, the FTC’s guidelines state that parties should use clear and unambiguous language, make disclosures stand out, and display disclosures close to the claims to which they relate. The FTC recently commented that consumers may not understand disclosures such as “#sp,” “Thanks [Brand],” or “#partner.” Moreover, video and audio disclosures should be easily noticed and understood.

How to Make Social Media Disclosures Compliant

While sufficiency of disclosures will often depend on the circumstances, parties should provide essential information in a clear and noticeable format so that consumers will see and understand the disclosures; the FTC will look at the net impression and consider how a disclosure looks and sounds in relation to the other content. The FTC has stated that “#ad” would “likely be effective” for disclosing an advertisement on a platform such as Twitter.
 
Accordingly, parties should at minimum implement compliance policies and programs and instruct and monitor influencers and affiliates on proper disclosures. As the guidelines apply to all platforms, disclosures should be made in both photos and videos, and parties should consider how to maintain disclosures if content is re-posted or viewed on various devices.
 
Companies may also benefit from consulting with experienced legal counsel, who can review endorsements in the context of each particular business. Finally, as platform limitations are not a defense, if a disclosure cannot be made clear, one may want to rethink the endorsement all together.
 

Authors: Karl Kronenberger and Liana Chen, Kronenberger Rosenfeld, LLP
 

This entry was posted on Sunday, June 11, 2017 and is filed under FTC Advertising Law Compliance, Internet Law News.






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