FTC Issues Further Guidance on Endorsements in Social Media

September 27, 2017

By: Eric P. Bergner and Alexandra M. Farin

With the growing and prevalent use of social media platforms for advertising purposes, the FTC has recently focused its attention on endorsements made by “brand influencers”, – or spokespersons who are paid to endorse a brand through social media – and has published supplemental guidelines specific to FTC compliance in this sphere.

The FTC Endorsement Guidelines dictate the proper use of endorsements and testimonials in advertising, and it is the advertiser who is subject to liability for its spokesperson’s failure to abide by these Guidelines.  Therefore, it is imperative that, in the event an advertiser decides to use a brand influencer for advertising purposes, the advertiser monitors the influencer’s social media posts to ensure that they are FTC compliant.  This month, the FTC released an updated version of its article The FTC’s Endorsement Guides: What People Are Asking, which provides question-and-answer style clarifications regarding the proper application of the Guidelines to particular forms of advertising.  The newest updates focused specifically on social media related inquiries, targeting the practices of brand influencers.  The following are only some of the important guidelines highlighted by the FTC:

  • The mere posting of an image of a product by a sponsored brand influencer constitutes an endorsement requiring a disclosure.  Similarly, if a brand influencer tags the brand by which s/he is sponsored in an image, this also constitutes an endorsement requiring a disclosure.
  • A material connection between a brand and an endorser requiring disclosure is not merely created by the payment of money, but also through other types of compensation such as giving the endorser free items or discounts, travel accommodations, a quid pro quo relationship for product reviews, or donations made to charity in exchange for product reviews.
  • Brand influencers outside of the U.S. must follow the Endorsement Guidelines if it is reasonably foreseeable that his or her content will be seen by and affect U.S. consumers.
  • Disclosures required for YouTube videos must be contained in the video itself, as disclosures in the description of the video are insufficient.  Disclosures in the description of an Instagram post must be included within the first three lines of text so that the user does not need to click “more” to see it.  It is recommended to add disclosures to Snapchat and Instagram stories by superimposing text over the post so that the disclosure is clear enough for the user to read in the amount of time s/he is given to view the post.
  • Endorsers should not rely upon the disclosure features built-in to certain social media aps because it is not certain that such a disclosure would be sufficiently clear or conspicuous.
  • Disclosures such as “#client,” “#advisor,” “#consultant,” “#ambassador,” and “employee” without further clarification are insufficient. Instead, “#BRANDambassador,” “BRANDconsultant,” or “BRANDemployee” is more appropriate. 
  • Sponsored livestreams must have multiple periodic disclosures throughout the stream.

Advertisers must be aware of these guidelines because it is ultimately their responsibility to confirm that the endorsements they sponsor are FTC compliant.  For the full text of the FTC’s supplemental guidelines, click here.  For more information, please contact Eric P. Bergner at ebergner@mosessinger.com or 212.554.7855, or Alexandra Farin at afarin@mosessinger.com or 212.554.7637.

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