The Federal Trade Commission (FTC) recently sent out more than 90 letters to various influencers to educate them on the responsibility of how to disclose their relationship with brands.
The endorsement guidelines state that if there is a material connection that might affect the weight of the consumer's decision about the brand, the person reviewing the product or service must state it in the post.
A material connection could be a business or family relationship, monetary payment, or the gift of a free product, according to the FTC. The endorsement guidelines apply to marketers and endorsers also known as influencers.
The move gave the marketers at Rakuten Marketing an idea. The company recently launched a brand quality and Regulatory Compliance service. The investment supports the FTC’s recent move to improve disclosure in endorsements across blogs and social media that affect the weight or credibility that consumers, publishers or other affiliates give to product endorsements.
In 2016, the FTC announced a settlement with Lord & Taylor after accusing the retailer of allegedly deceiving customers by "paying for advertisements on fashion blogs and the online publication Nylon without revealing that the posts were, in fact, paid promotions."
Jennifer Moor, brand quality and regulatory compliance lead at Rakuten Marketing, plans to meet with the FTC to help the agency plan an "endorsement" conference to help advertisers and influencers understand the processes to ensure consumers aren't "deceived in any way."
Rakuten recently launched a service based on technology to help advertisers make sure their affiliate programs are compliant. The brand quality service helps advertisers monitor processes and ensure companies are compliant with the law, especially when "free claims" and "environmental claims" are involved.
Through third-party tools, Rakuten turns on technology that audits the distribution of their advertising through links or posts. It also searches the Web looking for "trigger" terms and flags the content to report back to the advertiser. This is one way that brands can monitor whether bloggers and publishers adhere to FTC standards. When the technology identifies a violation the platform reaches out on behalf of the advertiser.
"If advertisers don't catch it and someone else does, they risk being on the bad end of the FTC letter for violating laws," said Rakuten CEO Tony Zito.
The company has been running the platform in beta and will formally launch the product this week.