What Brands Need to Know about FTC Regulations for Influencer and Celebrity Marketing Campaigns on Instagram

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Brands must educate themselves on how to use celebrity marketing in the most effective way that conforms to the rules set forth by the Federal Trade Commission (FTC).

Even though the FTC has cracked down on celebrities and influencers for not explicitly labeling endorsed posts, there is still a huge lack of transparency regarding paid relationships.

In April 2017, The FTC issued a notice reiterating the rules for signposting paid ads on social media. They sent over 90 letters directly to celebrities, athletes and other influencers noting their improperly labeled posts. Even so, a study revealed that during May 2017, 32 of the top 50 celebrities posted some sort of sponsored content and 93% of those posts weren’t signposted correctly.

With changes underway, it’s essential for brands to know what the FTC requires, what social channels are doing to lessen the problem and what brands should do to avoid issues and successfully execute a social influencer campaign.

What the FTC Requires

The FTC Guidelines state any “material connection” between an influencer and an advertiser must be made clear. Meaning if there is any kind of relationship that could affect the way the consumers view the credibility of the post, it must be exposed.

The FTC also instructs hashtags must be easily interpretable. Unclear hashtags like #sp (meant to indicate sponsored post) don’t have a clear meaning to all consumers, causing the material connection to go unnoticed.

Hashtags must also be near the top of the post. On Instagram, text indicating the post is sponsored must be before the “more” button. The info needs to be visible without having to look further to find it.

What Social Channels are Doing

In an attempt to restore clarity and structure to sponsored posts, Instagram has launched a “paid partnership” feature. This allows for influencers to indicate the sponsorship above the post, under their name, in the space where a location is often put.

This will give influencers and advertisers a clear-cut way to disclose paid relationships, leaving ambiguity out of it. The #ad or #sponsored labels and their variations being used now leave more room for uncertainty in some cases.

While Instagram isn’t enforcing use of the feature at this time, it is a step towards stricter regulation and allows brands an easy way to avoid any questioning by the FTC.

What Brands Can Do

It’s best for brands to be diligent and stay up to date on the latest news and requirements from the FTC regarding influencer marketing and not just rely on its agencies. It’s necessary to be aware of the regulations to ensure a brand doesn’t end up damaging its image.

One reason why social media influencer campaigns are loved by brands is because of the genuine and natural way consumers are exposed to brands or products. Some brands fear clearly labeled posts could diminish that effect.

The key to getting around this issue is finding celebrity and influencer partners that make sense. If a partnership is logical, then it will seem authentic and genuine even if clearly labeled as a paid endorsement.

photo credit: Heidi Klum via Instagram

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The Importance of Following FDA, FTC Regulations on Social Media in Celebrity Marketing

Kim Kardashian Diclegis instagram

Kardashian’s tweet is a reminder for pharmaceutical companies about social media.

At the end of every drug commercial comes the long list of health risks stated by the narrator.  This is a requirement enforced by the Food and Drug Administration (FDA) for all drug advertisements, and being an international celebrity as big as Kim Kardashian does not omit you from this regulation.

The FDA forced Kim Kardashian to recall a testimonial advertisement that she posted on her Instagram and Twitter about the morning sickness drug Diclegis. In the caption, she mentions positive effects of Diclegis such as, “I felt a lot better,” and, “It’s been studied and there was no increased risk to the baby.”  However, what Kardashian failed to mention was any of the drug’s risks or side effects.

A Warning Letter was sent on Aug. 7 to the executive vice president of Duchesnay, Inc., the pharmaceutical company that owns Diclegis. Among stating risks and facts that the posts failed to mention, the FDA requested that Duchesnay, “immediately cease misbranding DICLEGIS,” (aka take down the post and post ads with all appropriate information in the future). The letter also demanded a written response by Duchesnay by Aug. 21, and so far no response has been released.

Ads about drugs aren’t the only type of industry that has rules to follow. In 2013, the Federal Trade Commission (FTC) updated their digital advertising guidelines, titled .com Disclosure, which stated that all digital media forms, including social media, must follow FTC advertisements and endorsement regulations.

The .com Disclosure particularly concerns, “space constrained screens and social media platforms,” as it obviously poses a challenge to fit all required material in a short 140 character tweet.

In regards to testimonials and endorsements, the main guidelines that the FTC focused on are:

  1. The post must “clearly and conspicuously” disclose that it is a paid endorsement, and a link to a disclosure is not usually enough. The document recommends using “Ad:” or “#ad” as a short way to noticeably disclose the information.
  2. The post must make clear what the average results are for the product, not just how it worked for the celebrity. Their example of a weight loss drug suggests saying, “Typical loss: 1 lb/wk.”

Unfortunately, as in the case of Duchesnay, it is the brand that has to deal with consequences by the FDA or FTC when a celebrity violates the regulations on their accounts. Some online celebrity endorsements have ignored the guidelines and not seen any repercussions (yet), like Kourtney Kardashian’s ex-husband Scott Disick’s post about Express Smile Atlanta. But, even non-high-profile people who post endorsements can cause backlash for companies. The Deutsch LA ad agency caused their client, Sony, to refund consumer money after they had employees post promotional tweets.

For more information, visit the FTC Endorsement Guides.

photo credit: instagram.com/kimkardashian