FTC's Warning to Influencers that Clear Disclosures Are Key
In recent years, the rise of influencer marketing has reshaped the way brands connect with consumers. With social media platforms playing an integral role in promoting products, the Federal Trade Commission (“FTC”) has stepped up efforts to ensure influencers are transparent about their relationships with brands. Last month, the FTC has issued a series of warnings and updates, providing guidance to influencers on how to properly disclose their material connections in social media posts.
On September 7, 2017, the FTC settled charges against Trevor "TmarTn" Martin and Thomas "Syndicate" Cassell, two popular gaming influencers, for promoting their online gambling site, CSGO Lotto, without revealing that they owned the company. Alongside this enforcement action, the FTC sent warning letters to 21 influencers who had previously been contacted about non-compliant posts. These letters served as reminders that when influencers have a material connection to a product, whether through ownership, payment, or sponsorship, they must disclose this connection clearly and conspicuously.
The FTC has long emphasized the importance of transparency in influencer marketing, and these actions are part of an ongoing effort to educate influencers and marketers about their obligations. The updated guidance issued by the FTC includes new answers to frequently asked questions, covering topics such as how to disclose material connections on platforms like Instagram and Snapchat, as well as the use of hashtags like #ad, #spon, and #ambassador. The FTC's key advice is simple: disclosures need to be clear, easy to find, and understandable to consumers.
One of the primary concerns the FTC raised was the practice of influencers tagging a brand in an image or using unclear language that didn’t adequately communicate the nature of their relationship with the brand. The FTC has emphasized that ambiguous terms or disclosures hidden behind links or at the bottom of posts are not sufficient. Instead, influencers must ensure that the disclosure is prominent and placed in a way that is easy for the audience to see, even when browsing through fast-moving feeds.
The updated guidance also underscores that influencers should avoid using shorthand terms like #sp, #spon, or #collab unless they are universally understood as disclosures. Terms like these can be unclear to the average consumer and don't meet the FTC’s requirements for transparency. Influencers are urged to use plain language and ensure that their disclosures are placed in a context where the audience is likely to notice them.
With the rise of social media as a powerful marketing tool, the FTC's actions serve as a crucial reminder that digital influencers must be held to the same standards of honesty and transparency as any other form of advertising. The ultimate goal is to protect consumers from deceptive practices while ensuring that influencers and marketers maintain trust with their audiences. As influencer marketing continues to grow, the FTC’s guidance will play an essential role in shaping how brands and influencers interact with consumers online.
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