The Federal Trade Commission (FTC) protects consumers from false and misleading advertising. Social media postings fall under the purview of the FTC. Social Influencers are often approached to promote products or services to their followers on social media. This type of promotion requires that you understand what FTC rules for endorsements.
If you mention a product or service in your social media posts, what is it that you need to be doing? The FTC cares about what consumers may find to be false or misleading advertising. Your social media posts are considered advertising. False advertising is when you do not state something that is factually untrue. “I love Product X! I have been using Product X for years!” when, in fact, you did not like Product X or you did not use or try Product X.
Misleading advertising is a broader category than false advertising. This is an area where you want to give your attention. If you pay out of your own pocket for a product or service and want to share your thoughts on the product or service with people, you are probably fine. If a connection between you and the product/service exists, then you need to consider making a disclosure of the connection. A consumer’s knowledge of a connection between you and the product/service might affect how much weight a consumer gives the endorsement you are making. Manipulating the weight a consumer gives to your endorsement is what the FTC cares about in your social media postings.
If you have a personal or family relationship to a product or service, disclosing the nature of the relationship in your endorsement is needed. If you received the product or service in exchange for compensation, then a disclosure needs to be included in the endorsement. If you do have a personal relationship with or receive compensation for an endorsement, it does not mean that you have done anything wrong. It means that you need to be aware of and take the extra steps to follow the guidance of the FTC for your endorsements.
What is compensation? The meaning of compensation should be taken in the context of how the product or service is given to you. Is it with the expectation that you are going to talk about or show the product on your social media? If yes, then you should view the product or service as compensation or any other discount or money that you receive. For the FTC, compensation includes free products, small amounts of money or discounts offered to you by a company with the expectation that you are talking about it in your social media. If you happen to be given a free sample at the grocery store and you really like the product, there was no expectation you would review the product on your social media. No disclosure is needed.
What type of disclosure do I need for my social media posting? The FTC wants to see essential information for your relationship to the product/service given in a clear and conspicuous way. What does it mean to be clear and conspicuous? Your disclosure should be as close to the endorsement or statement as possible. Placing disclosures in a Terms and Conditions section on another page is not enough.
If you are working in a medium that is audio only (e.g., podcast), then the volume, pacing, and language of the disclosure need to match the rest of your audio posting. For video disclosures, you need to have a visual disclosure on the video. If you are posting a video where the entire video is an endorsement (e.g., an unboxing episode), you should ensure a visible and continuous disclosure for the entire video containing the endorsement. If the endorsement is only for a part of the video, then the disclosure need only be present for that part of the video.
If you have previously posted a disclosure for the endorsement and then re-use or discuss the product/service again in a new posting, you will need to make the disclosure again in the new posting. For example, if you are identifying the company or brand of clothing you received for free in a second or subsequent posting, you will need to disclose that you received the clothing for free again.
You need to understand and keep up to date on what consumers actually look at in your social media posting and what consumers ignore. If you understand that most people will not scroll down or open up collapsed sections, then placing the disclosure in these locations will not be enough. For example, popups are commonly blocked, so, making the disclosure via a popup window is likely to not be enough.
Hashtags for disclosures need to be clear and understandable. Recommended is using #ad at the very beginning of a post. Placing #ad in the middle of a string of hashtags is not considered enough as it can be easily overlooked. Another hashtag that is considered clear is #[PRODUCT NAME]_ambassador rather than #ambassador, as it may be confusing about what you are an ambassador for without the product name (or company name).
If a disclosure is located where a consumer needs to scroll to see it, and you know that consumers do scroll to see content, using cues to encourage scrolling to the disclosure is recommended. If the social media does not allow for space to place the disclosure, hyperlinks may be enough. Although when using hyperlinks, the FTC expects you to know effectiveness and track click-through numbers of the hyperlinks. There are several things to consider when using a hyperlink, including placement, monitoring click-through rates, and consistency with other hyperlinks in your social media postings. The FTC understands character limitations on platforms such as Twitter and Instagram. However, the FTC is not sympathetic if you are making an endorsement and a disclosure is needed in your social media post.
Disclosing when your compensated (given for free or for money) in exchange for being mentioned in your social media feed requires you to establish a consistent policy that you follow. If you feel that making a disclosure may hurt you with your audience, then it is a sign that a disclosure is likely necessary. The FTC does post guidance as new situations arise or if they find practices they find concerning. Checking the FTC website for free guidance is recommended. If you need or want help reviewing your disclosures or postings, please reach out to an attorney in your area that can help you with the review.
August 18, 2018
Disclaimer: Note content of this blog post (“post”) is accurate as of the date of writing; laws change frequently and readers should not rely upon the online information. The reader should seek the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.
Disclaimer: The information in this blog post (“post”) is provided for general informational purposes only, and may not reflect the current law in your jurisdiction. No information contained in this post should be construed as legal advice from LR Grunzinger Law Office or the individual author, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through, this Post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.