FTC Tightens Disclosure Rules For Influencers

The Federal Trade Commission is moving to tighten the rules for marketers working with social media influencers when it comes to disclosures alerting consumers that they are seeing paid content, according to Bloomberg, which first reported the news last week.

Michael Ostheimer, a deputy chief in the FTC’s Ad Practices Division, warned in the Bloomberg interview that the commission will be increasing the requirements for disclosure on sponsored posts, with most of the burden falling on advertisers (as opposed to the influencers who are paid to make the posts). Ostheimer explained: “We believe consumers put stock in endorsements and we want to make sure they are not being deceived.”

Among other thing the new, stricter rules dictate that brief disclosures like “#ad,” “#sp,” “#spon,” and “#sponsored” will no longer be sufficient in many cases, principally because consumers are unlikely to notice them and understand their meaning – which is doubtless part of the reason marketers favored them in the first place.

Much of their acceptability depends on how prominently they are displayed: thus “#ad” may be acceptable by itself if it comes first in the post before all other content, but not at the end. By the same token, truncated or abbreviated disclosures like “#sp” and “#spon” aren’t acceptable by themselves, regardless of position, because consumers can’t reasonably be expected to know what they’re supposed to stand for.

Ostheimer tells Bloomberg: “If consumers don’t read the words, then there is no effective disclosure… If you have seven other hashtags at the end of a tweet and it’s mixed up with all these other things, it’s easy for consumers to skip over that. The real test is, did consumers read it and comprehend it?”

Importantly, on sponsored video posts the disclosure must be spoken out loud or displayed on screen.

Additionally, all forms of compensation should be disclosed, including those beyond straightforward cash payments, including free products and services provided to influencers by brands or agencies.

The commission is already enforcing tighter standards for brands working with online influencers. Last month the FTC rapped Warner Bros. for failing to include “conspicuous” disclosures in a social influencer campaign to promote its Lord of the Rings game, “Middle Earth: Shadow of Mordor.” As part of a settlement with the company the FTC required that Warner Bros. implement an internal compliance system and make sure that influencer partners are also aware of the rules regarding disclosure.

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