As you grow as a content creator, a common goal is to obtain sponsorship deals with various companies. Sponsorships are a great way to earn money for your content and grow your audience. Sponsorships can be for anything, such as hair vitamins, apps, or dental work.
Sponsorships, however, also come with a host of responsibilities. With a sponsorship, you are associating your name with a product, which always comes with potential risk. To mitigate this risk, the Federal Trade Commission (“FTC”) requires content creators to make certain disclosures when making sponsored posts on their social media accounts.[1]Failure to comply with the FTC disclosure rules could cause a content creator to end up with an enforcement action from the FTC. Consequences could include a permanent injunction against the content creator to refrain from engaging in sponsored content in the future and disgorgement of profits from undisclosed sponsorships.[2]Recently, the FTC has cracked down on content creators who do not follow the disclosure rules, sending warning letters to many well-known content creators, such as Victoria Beckham, Heidi Klum, and Scott Disick.[3]
Even further, according to a study by Activate entitled “2018 State of Influencer Marketing,” only 52% of influencers and 60% of marketers have a solid understanding of the FTC guidelines for sponsored posts.[4]Additionally, only 56% of influencers and 31% of marketers could correctly identify how to disclose a free product gifted to a content creator.[5]As a result, here is what you need to disclose when posting sponsored content in order to avoid any FTC violations:
- The FTC Guidelines Include More Than Paid Sponsorships.
A common misconception is that if there is no monetary exchange between a content creator and a brand for a sponsored post, the content creator does not need to disclose anything. This is false! The FTC Guidelines state that when there is a “material connection” between the brand and the content creator that “might materially affect the weight or credibility of the endorsement,” it has to be fully disclosed.[6]This means that if a brand sends its products to a content creator for free only in exchange for coverage on the content creator’s social media accounts, this should still be disclosed.[7]Although the brand is not paying the content creator for the coverage, the fact that the product was given to the content creator for free might affect how the audience views what the content creator has to say about the product.[8]Consequently, it is better to be safe rather than sorry when posting about products that you did not buy as an individual consumer.
- Be Clear and Conspicuous in Your Disclosures.
Next, there are requirements about what exactly content creators need to say in sponsored posts. The FTC states that a disclosure must be “clear[] and conspicuous[].”[9]In the context of social media posts, this means that the disclosure must be clearly stated in the caption of the post, brands should be tagged in the post if the social media platform allows for it, and/or hashtags on the post should use the words “ad” or “sponsored.”[10]Additionally, the disclosure language should be easy to find, meaning that it should not be in buried in the middle of a large hashtag list or should not be visible only if the reader clicks “more” on the caption.[11]To be safe, the disclosure language should be at the beginning of the caption.[12]
- You Must Be a “Bona Fide” User of the Product.
In order to post sponsored content, a content creator must ensure that he or she has actually used the product that they are advertising. Specifically, the FTC states that when a content creator (also referred to as an endorser) posts about a product, “the endorser must have been a bona fide user of it at the time the endorsement was given.”[13]Additionally, the sponsored content can only be public as long as there is a “good reason to believe that the endorser remains a bona fide user of the product.”[14]The FTC explains that a “good reason to believe” can be that the endorser reaffirms his or her views on the product “at reasonable intervals where reasonableness will be determined by such factors as new information on the performance or effectiveness of the product, a material alteration in the product, changes in the performance of competitors’ products, and the advertiser’s contract commitments.”[15]
In other words, content creators must only advertise products that they have personally used and currently endorse. Additionally, as the FTC implies, this is not a one-time inquiry. Content creators who post sponsored content should periodically reassess whether they still hold the same views for products that they have posted about in the past, depending on factors such as changes or new information regarding the product.
- Utilize Disclosure Tools, Even Though They May Not Always Be Sufficient.
Finally, social media platforms have made it easier to comply with FTC guidelines by creating disclosure tools for sponsored posts. These disclosure tools on platforms such as Instagram, Facebook, and YouTube allow content creators to easily create posts that tag the sponsoring brands.[16]However, these disclosure tools are not always sufficient to fully comply with the FTC Guidelines. Recently, the FTC stated that users should not “assume that disclosures built into platforms are sufficient.”[17]Consequently, content creators should not only incorporate disclosure tools into their disclosure routine, but should also take additional precautions to clearly and conspicuously notify consumers that the post is sponsored. A combination of multiple disclosure methods can ensure that content creators cover their bases to safely comply with the FTC Guidelines.
[1]See 16 C.F.R. § 255.
[2]See This Just in: FTC Takes Action Against Influencers, Marketers Over Sponsored Posts, Fashion L. (Apr. 19, 2017), https://www.thefashionlaw.com/home/this-just-in-ftc-takes-action-against-influencers-marketers-over-sponsored-posts.
[3]Id.
[4]See Amanda Pressner Kreuser, Here’s Exactly How Brands and Influencers Should Disclose Sponsored Content, Inc. (Sept. 27, 2018), https://www.inc.com/amanda-pressner-kreuser/heres-exactly-how-brands-influencers-should-disclose-sponsored-content.html.
[5]Id.
[6]16 C.F.R. § 255.5.
[7]See Krueser, supra note 4.
[8]The FTC’s Endorsement Guides: What People Are Asking, Fed. Trade Comm’n (Sept. 2017), https://www.ftc.gov/tips-advice/business-center/guidance/ftcs-endorsement-guides-what-people-are-asking.
[9]16 C.F.R. § 255.5.
[10]See id. (referencing examples).
[11]Krueser, supra note 4.
[12]Id.
[13]16 C.F.R. § 255.1(c).
[14]Id.
[15]Id.§ 255.1(b).
[16]Krueser, supra note 4.
[17]@FTC, Twitter (Sept. 20, 2017, 04:17 PM), https://twitter.com/FTC/status/910598716062650374.
Legal Dos and Don'ts for Social Media Influencers 