If journalists shouldn’t bury the lede, then influencers shouldn’t bury the #ad.
That’s at least what new guidelines from the Federal Trade Commission (FTC) suggest. Earlier this summer, the commission released a new set of guidelines around online reviews and social media endorsements, some of which could impact how influencers and advertisers disclose sponsored content.
The last update to its endorsement guides occurred in 2009, and while much has changed in the influencer space since then, those working in the industry tell us that many of the changes were pretty predictable. Under the updated guidelines, influencers will likely have to be clearer about differentiating regular content from branded posts.
“The most important thing to say about all the updates is the basic principles haven’t changed,” Michael Atleson, senior staff attorney at the FTC, told us, noting that the FTC’s “Disclosures 101 for Social Media Influencers” brochure from 2019 is the same, as is the FTC’s definition of “clear and conspicuous” disclosures.
“What we’re doing is clarifying or expanding on how we think these principles…apply in a world in which social media ads, including influencer campaigns and the use of online reviews, are more and more prevalent,” he said.
Still, the new guidelines have raised some questions, so we broke down some of the basics.
Are the guidelines the law?
No, but they are intended to help people avoid breaking it. “The endorsement guides are the official commission views on what sorts of practices relating to endorsements, we think, violate the law,” Atleson said. In this case, the endorsement guidelines were updated to remind people of the rules about deceptive advertising as it relates to the FTC Act.
“The point of having these guides over time is to help businesses with compliance. So there’s no such thing as violating the guide, you violate the law,” he added.
Some of the topics addressed in the new guidelines include online reviews, virtual influencers, and child-directed advertising.
What about disclosures?
The updated guidelines stress that creators should be even more upfront about which posts are sponsored, though Atleson said the FTC has consistently emphasized that for years.
“Where you put the disclosure and whether you use a bunch of gobbledygook, like a hashtag and some letters mixed in with a whole bunch of other hashtags…We have seen that as a problem,” he said. “That's why we thought it was important to actually put it into guides.”
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Still, there’s no one-size-fits-all approach to how to word a disclosure—although you probably shouldn’t make people scroll or click “more” to find it, according to the FTC’s FAQ.
Holly Melton, partner at law firm Crowell & Moring LLP who co-leads the firm’s advertising and media practice, told us it’s a “good thing to maintain some flexibility” and not put strict parameters on how to word disclosures. “That’s probably the biggest kicker, ‘What’s the magic language?’” she said. “I don’t think there is any—and for good reason.”
Is using a platform’s tools enough to be “clear and conspicuous” about disclosures?
Up until now, that seems to have been the industry consensus. “The fact that [the FTC] hasn’t updated [its guidelines] as the apps have updated their tools has been problematic,” Permele Doyle, founder and US president at influencer agency Billion Dollar Boy, told us.
While it may have been enough to abide by a platform’s guidelines before, Melton said that’s “definitely not a foolproof approach now.” If a platform doesn’t require that disclosures are “unavoidable to a consumer,” she said, it probably doesn’t meet the FTC’s standard for clear and conspicuous disclosure.
“You have to sort of judge for yourself whether using that platform, it’s going to be clear and conspicuous to the people who are going to be reading your posts, or videos, or whatever it is,” Atleson said. “It’s probably, from our perspective, more important to comply with the law first and platform requirements second,” he added.
Will changes in these new guidelines impact engagement?
According to people in the industry, probably not. “Audiences are becoming so sophisticated, it doesn’t really matter,” Doyle said. “They know that it's sponsored; like having #ad or #sponsored doesn’t really impact them.”
Ali Fazal, VP of marketing at creator management platform Grin, agreed: “I think that there’s historically been this fear from people who don’t really understand the creative economy that something being an endorsement or an advertisement in an obvious or transparent way might turn off consumers, but our data suggests just the opposite.”
As did Melton: “I don’t think that people are as put off by disclosures as companies might otherwise think. This is the way that companies market now, so I would always advise an influencer, an agency, or a brand to err on the side of disclosure.”