Top 5 Things You Should Know About FTC Regulations

March 13, 2018

By admin, creative at D'Marie

FTC

Ever since the beginning of sponsored posting online, the FTC has been very present in the conversation. You’ve probably seen posts across Instagram and other platforms with #ad or #sponsored at the end, so chances are, you know a bit about disclosure requirements from the FTC. However, there are some nuances and rules that even experienced creators are unaware of. Some of these might surprise you!

  1. According to the government website on FTC regulations, the reason that influencers need to disclose when they are paid to endorse a product is to protect “the basic truth-in-advertising principle that endorsements must be honest and not misleading.” This means that the government wants viewers of advertising to be told the proper information needed for them to be able to make an informed decision, and weigh all of the variables to know whether or not they think purchasing the product is in their best interest. The FTC website gives the following example to explain why this is important:

    “Say you’re planning a vacation. You do some research and find a glowing review on someone’s blog that a particular resort is the most luxurious place he has ever stayed. If you knew the hotel had paid the blogger hundreds of dollars to say great things about it or that the blogger had stayed there for several days for free, it could affect how much weight you’d give the blogger’s endorsement. The blogger should, therefore, let his readers know about that relationship.”

  2. The FTC requires sponsored content and commercials to be disclosed, however, they don’t require the purest form of product placement to be disclosed. Their definition of “product placement” is “merely showing products or brands in third-party entertainment content”. This would include those times when you’re watching TV and all of the characters seem to be using CoverGirl cosmetics with the occasional close-up on them picking up the products. Since they aren’t endorsing the products (like verbally saying they like them), it’s pure product placement and doesn’t need to be disclosed on Television.
  3. On social media, the rules are a bit stricter. If you include a product in content as part of a sponsored campaign, if you’re being compensated to post about it, of if you’re getting a perk like a discount on a future purchase or being entered into a sweepstakes for a large prize, then a disclosure is deemed necessary.
    Most people find it surprising that the FTC goes to such lengths to disclose every affiliation that people have to products- even when they’re just entering a sweepstakes, but they do this to support their larger goal of transparency in advertising.
  4. The FTC encourages online content creators who are discussing a product given to them for free to state that it was gifted to them. That disclosure is enough if there was no other compensation, but if the product was sent for free as well as any sum of money given to the creator for the post, then the disclosure about the product being free doesn’t suffice on it’s own. The FTC wants creators to have the most relevant disclaimers about their posts that will keep their reviews and company relationships as transparent as possible.
  5. Surprisingly, the Instagram paid post tool might not cut it for the FTC. They’re very specific about what type of disclaimer is apparent enough for an audience to recognize, and what is too discreet. Their main goal is to make sure that everyone who sees the post understands that it was sponsored by a brand. They have even said the following using vague terms, but it directly applies to the Instagram paid post tool released last June:

    “Just because a platform offers a feature like that is no guarantee it’s an effective way for influencers to disclose their material connection to a brand. It still depends on an evaluation of whether the tool clearly and conspicuously discloses the relevant connection. One factor the FTC will look to is placement. The disclosure should catch users’ attention and be placed where they aren’t likely to miss it. A key consideration is how users view the screen when using a particular platform. For example, on a photo platform, users paging through their streams will likely look at the eye-catching images. Therefore, a disclosure placed above a photo may not attract their attention. Similarly, a disclosure in the lower corner of a video could be too easy for users to overlook.”

    As you can tell, the FTC isn’t playing around when it comes to disclosures. Although they seem to want you to scream your sponsored status from the rooftops every time it’s somewhat relevant, it’s better to be safe than sorry.