If there is one legal point that applies to every brand involved in influencer marketing, it’s disclosure requirements. They prescribe influencers to disclose their relationship with the brands, while the brands are expected to educate and monitor compliance. This lesson will dive into the details.
- Transparency is an integral part of your influence or marketing program. In this video, we'll look at why it is important and who should do what to ensure you're on the safe side. The year 2016 was marked by several exemplary cases of when the US Federal Trade Commission went after advertisers whose influence or marketing efforts failed at transparency. In just the first eight months of that year, a major motion picture corporation, a leading retailer, and a biomedical company were all found to be out of compliance with the Federal Trade Commission guidelines resulting in heavy fines.
One proposed settlement was $40 million. These FTC lawsuits aren't new and have been springing up here and there since 2011. It all boils down to the influencer's compliance with the Federal Trade Commission's Guidelines Concerning the Use of Endorsements and Testimonials. Having realized that with the emergence of the new media new advertising venues also developed, the FTC revised the guidelines in 2009.
The Guides were said to apply to testimonial advertisements, celebrity endorsements, as well as endorsements by consumers, experts, bloggers, and other word-of-mouth marketers. Yes, influencers of all types and sizes. The underpinning idea is that when there is a material connection between the advertiser and the endorsing influencer, it must be clearly disclosed. The end consumer may not expect that the endorser is being paid by the advertiser or received compensation by way of a free product.
Plenty has been written about the subject, but the gist of the FTC's requirements of brands can be distilled to two key expectations. First, educate advertising partners on the importance of having clear and conspicuous disclosures of your relationship in their marketing campaigns. You want to do everything possible to educate them in this crucial matter. Second, monitor influencer compliance. Utilize content monitoring tools and manually double check your top performing influencers to ensure that they are indeed compliant with the FTC's disclosure guidelines.
Another important point to add is that the Federal Trade Commission's disclosure laws apply not only to businesses incorporated in the US, but also to foreign business entities, if they target US citizens through their marketing. Additionally, be mindful that similar organizations in other countries require similar compliance. In Canada, there is Competition Bureau which in 2015 fined a national phone company $1.25 million for having its employees write positive reviews without disclosing their corporate title.
In the UK, there is Competition and Markets Authority who in 2016 issued numerous warnings to an influencer marketing agency as well as multiple social media influencers about undisclosed advertising. So as you can see, transparency is essential to your influencer marketing program. Study the laws and regulations applicable to your target market, and make sure you abide by them.
- Types of influencers
- Tools for influencer identification, research, and comparison
- Finding contact info
- Activating influencers
- Measuring the effectiveness of influencer marketing