What the FTC’s Proposed Changes to its Endorsement Guides Suggest about Influencer Marketing
Last month, my colleagues posted about the FTC’s proposed changes to the Endorsement Guides. This post takes a closer look at how those proposed changes could impact influencer campaigns by answering five questions that we frequently get from marketers.
What is an endorsement? The FTC provides new guidance on what constitutes an “endorsement.” In one example, an influencer uses a product that a manufacturer sent him for free and comments on it favorably in a video. It’s no surprise that the FTC concludes that the comments constitute an endorsement, but it’s important to note that even more subtle plugs could qualify. For example, the FTC proposes updating the definition of “endorsement” to indicate that “tags in social media posts can be endorsements.”
What must be disclosed? Over the years, there has been debate over what words influencers should use to disclose their connections. The FTC’s proposed edits don’t touch on that, so we’ll have to rely on existing guidance (like this). The FTC notes, however, that although the disclosure of a material connection doesn’t require the “complete details of the connection, it must clearly communicate the nature of the connection sufficiently for consumers to evaluate its significance.” That’s somewhat helpful, but it’s still not clear exactly how much detail the FTC expects.
How must the disclosure be made? The general standard is that disclosures must be “clear and conspicuous.” Marketers who have lamented that the standard is vague will likely not be happy with the FTC’s proposed specificity. For example, the FTC addresses things like font size, placement, contrast, and time on screen. In general, though, disclosures should be easy to see and understand. The FTC also provides a few examples that shouldn’t come as a surprise to those of us who have been following the Commission’s actions in this space.
Is a disclosure always required? Some commenters have asked the FTC to acknowledge that for some famous influencers, sponsorships are expected and, therefore, that a disclosure may not be necessary. “Without accepting or rejecting that proposition,” the FTC proposes stating that an endorser’s material connection need not to be disclosed “when it is understood or expected by all but an insignificant portion of the audience.” Although that comment suggests some flexibility, it’s likely that marketers and the FTC are likely to disagree over what “all but an insignificant portion of the audience” are likely to understand or expect.
What about claims made by influencers? Although the FTC investigations involving influencer campaigns over the past decade have generally focused on the issue of whether influencers have adequately disclosed their connection to the companies they endorse – and most of the proposed edits touch on that same issue – it’s also important to keep in mind that companies can be held liable if influencers make claims that the companies couldn’t otherwise substantiate themselves. The FTC urges advertisers to provide guidance to influencers and monitor their compliance.
For a deeper dive on these (and other) issues, see my Law360 article.