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Influencers disclose your brand relationships

May 9, 2017

     "If at first you don't succeed, try, try, try again."  The Federal Trade Commission (FTC) appears to be taking this proverb by William Edward Hickson to heart.

     With the rise of social media, the FTC has been concerned that influencers have been using social media to influence consumers without adequately disclosing the business relationship between the influencer and a brand. The FTC officially addressed this issue in July 2015 with the release of its revised Endorsement Guides. In the Guides, the FTC's position is that if:
 

there is a “material connection” between an endorser and an advertiser – in other words, a connection that might affect the weight or credibility that consumers give the endorsement – that connection should be clearly and conspicuously disclosed, unless it is already clear from the context of the communication. A material connection could be a business or family relationship, monetary payment, or the gift of a free product. Importantly, the Endorsement Guides apply to both marketers and endorsers.

 

Since then, the FTC settled with some parties over the lack of disclosure (e.g., link 1link 2link 3). The FTC has gone on record as saying that they were concerned about the potential lack of disclosure from influencers (see Bloomberg link). And, last month, the FTC sent out over 90 letters to influencers reminding them of their duty to disclose the business relationship between the influencer and a brand (see Press Release).

    If you are a social media influencer, you need to disclose your relationship with your brands. Brands are aware of the potential issues when the FTC begins to investigate them, and they have reacted by revising their sponsorship agreements to put the onus on you (the influencer) to be aware of and compliant with the FTC Endorsement Guides. 

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