The Federal Trade Commission recently circulated in excess of 90 letters to influencers and marketers reminding them of obligations to clearly and conspicuously disclose material connections in the context of social media promotions. The letters were sent following a review of a number of Instagram posts by celebrities, athletes and other influencers.
According to the Commission, the letters were informed by petitions filed by Public Citizen and affiliated organizations regarding influencer advertising on Instagram, and Instagram posts reviewed by FTC staff. This is the first time that FTC staff has reached out directly to educate social media influencers, themselves.
The FTC’s Endorsement Guides apply to both endorsers and marketers. The Guides provide, in pertinent part, that if there is a “material connection” between an endorser and an advertiser that is not clear from the context of the communication, that connection should be clearly and conspicuously disclosed.
A material connection could be a monetary payment, a close business or family relationship, or the gift of a free product.
Interestingly, the letters also specifically touched upon Instagram posts, stating that consumers viewing Instagram posts on mobile devices typically see only the first three lines of a longer post unless they click “more,” which many may not do. The staff’s letters informed recipients that when making endorsements on Instagram, they should disclose any material connection above the “more” button.
The letters also noted that when multiple tags, hashtags or links are used, readers may just skip over them, especially when they appear at the end of a long post. Meaning, a disclosure placed in such a string is not likely to be conspicuous.
Some of the letters addressed particular disclosures that are not sufficiently clear, pointing out that many consumers will not understand a disclosure like “#sp,” “Thanks [Brand],” or “#partner” in an Instagram post to mean that the post is sponsored.
The FTC has also issued Endorsement Guides: What People are Asking (a document that answers frequently asked questions) and .Com Disclosures: How to Make Effective Disclosures in Digital Advertising.
As always, endorsements must also reflect the honest opinion of the influencer.
The recently circulated letters should be considered a courtesy notice regarding applicable obligations. The recipients, and other marketers, are being scrutinized and it is highly unlikely that there will be another “free pass” from the Commission.
Social media influencers and marketers are on notice.
Contact an FTC Defense Lawyer to discuss social media marketing best practices and related advertising compliance issues, including disclosures, written policies, marketing contracts, influencer training/monitoring and substantiating product performance claims.
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Richard B. Newman is an Internet advertising compliance and regulatory defense attorney at Hinch Newman LLP focusing on advertising and digital media matters. His practice includes conducting legal compliance reviews of marketing campaigns, representing clients in investigations and enforcement actions brought by the Federal Trade Commission and state Attorneys General, commercial litigation, advising clients on promotional marketing programs, and negotiating and drafting legal agreements.
HINCH NEWMAN LLP. ADVERTISING MATERIAL. These materials are provided for informational purposes only and are not to be considered legal advice, nor do they create a lawyer-client relationship. No person should act or rely on any information in this article without seeking the advice of an attorney. Information on previous case results does not guarantee a similar future result.
