Influencer Marketing Law: An Easy-to-Understand Guide

December 20, 2019

The Federal Trade Commission published a guide called Disclosures 101 for Social Media Influencers to help brand ambassadors “stay on the right side of the law.” It’s available in English and Spanish, and we’ve broken down what you need to know, without all the legalese.

What is an influencer?

Influencers are people with sizable online followings who promote products and services for brands and businesses on YouTube, Twitter, Facebook, Snap Chat, Instagram, and niche social media sites.

Influencer Marketing Guidelines

“Material Connections” Matter

Influencers are legally obligated to disclose “material connections.”

So, what counts as a connection? According to the guidelines, any financial, employment, personal, or familial links qualify. The rules also state that “financial relationships aren’t limited to money.”

Influencer Marketing Law: Who Must Disclose a Material Connection?

Influencers must include disclosures if they:

  • Are paid by a brand or company;
  • Receive free or discounted products and services from a brand or company, even if the product or service is not what’s being reviewed;
  • Have a family member who works for, or is invested in, the company;
  • Invested in the brand or company.

What if I Don’t Have a Material Connection to a Brand or Company?

In its new influencer disclosure guide, the FTC makes a point to say that if you don’t have a relationship with a brand or company, you don’t need to disclose it. (This point could redirect the influencer marketing trajectory, at least when it comes to spon-con.)

What Should My Disclosures Say?

The FTC doesn’t provide concrete, must-follow verbiage, but it does give suggestions and guidelines. Generally speaking, the commission urges influencers to use “simple and clear” language. It also wants you to label promotional posts and videos with either “advertisement,” “ad,” or “sponsored.” Conversely, “sp,” “spon,” “collaboration,” or “collab” don’t cut it. Neither does “thanks” or “ambassador.” That said, “[BRAND]Partner” and “[BRAND]Ambassador,” do work. Couching your disclosure in a thank you statement like “thanks to [BRAND] for the free product” will also keep you on the right side of the law.

The guide also reminds influencers to keep “recommendations honest and truthful” because “it allows people to weigh the value of your endorsements.” It goes on to specifically instruct that lying about experiences with a product or service is out of bounds. How they’ll ever identify violators remains a mystery, but they chose to include it.

Where Should I Place My Disclosures?

According to the FTC’s influencer guide, disclosures must be “hard to miss.” It recommends placing it “with the endorsement message itself.” The guide specifically advises against putting disclosures:

  • Only on an “About Me” or profile pages;
  • At the end of posts or videos; or
  • A click away from what it’s modifying.

Hashtag junkies make note: the FTC also doesn’t want influencers to mix disclosures “into a group of hashtags or links.”

In the case of endorsement pictures, influencers must conspicuously “superimpose” their disclosures over the image and make sure it’s visible to the average viewer. For video endorsements, you must mention the disclosure a few times throughout the video. Additionally, adding a visual disclosure in the description and video is also helpful for people with hearing difficulties. Only putting a disclosure in the description, however, is offside.

Don’t Assume Anything

In the new influencer marketing guide, the FTC mentions compliance responsibility and warns to not “rely on others to do it for you.” Moreover, the commission warns, don’t assume that followers already know about your brand relationships. You must make disclosures on every single endorsement, and the rules apply to all influencers worldwide.

Influencer Coaching Courtesy of the FTC

The Federal Trade Commission also produced several videos that dive into the dos-and-don’ts of influencer marketing. Here they are.

Connect with an Online Influencer Lawyer

The Gordon Law Group works with marketing influencers on everything from contract negotiations to tax positioning. If the FTC has opened an investigation into your practices, or you want to avoid such a fate, get in touch today. We’ve beaten the FTC in court and have the know-how you need.

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