Influencer marketing is a BIG deal today. With influencer marketing, we target well-known individuals. Their effect on the purchase decision is significant for some consumers (followers). Because of some abuses in the use of influencer marketing, stronger FTC influencer marketing rules introduced new rules.
Why Stronger FTC Influencer Marketing Rules Are Needed
As far back as 2013, we asked. “Is It OK for Celebrities to Plug Products on Social Media?” Why?
Consider these observations from Nick Bilton, writing for the NY Times:
“Today, celebrities and people with large social media followings promote products, But often we cannot know if it’s an authentic plug. Or if they were paid to say nice things. Take Miley Cyrus, the pop star traveling around America promoting her new album. One morning, she posted on Twitter: ‘Thanks @blackjet for the flight to Silicon Valley!’ The details of the arrangement between BlackJet, a Silicon Valley start-up that arranges for private jet travel, and Ms. Cyrus are unclear. But Dean Rotchin, chief executive of BlackJet, said ‘she received some consideration for her tweet.’ Ms. Cyrus did not respond to a request for comment.”
So, these questions arise. Does a celebrity call out a product because they believe in it — without being paid? Or does the celebrity endorse a product because they receive payment?
Stronger FTC Influencer Marketing Rules Now in Effect
Because of ethical abuses, the FTC moved to set standards for acceptable influencer marketing.
Lawyer Jeff Brown gave his take on this issue for Advertising Age: “The FTC watches activity in social media channels. And it is prepared to take action against both advertisers and influencers if ‘material connections’ between an influencer and any promoted product or service are not clearly and conspicuously disclosed.”
To learn more, directly from the FTC, click the links:
- FTC Endorsement Guides: What People Are Asking. “Suppose you meet someone who tells you about a great new product. She tells you it performs wonderfully. And that it offers fantastic new features. Would that recommendation factor into your decision to buy? Probably. Now suppose the person works for the firm selling the product. Or receives payment from the firm to tout the product. Would you want to know that when you evaluate the glowing recommendation? You bet.”
- Guides Concerning the Use of Endorsements and Testimonials in Advertising. “The Guides represent interpretations of laws enforced by the FTC. They provide the basis for voluntary compliance by advertisers and endorsers. Practices inconsistent with these Guides may result in corrective action by the FTC. And this occurs if, after investigation, the FTC believes believe practices involve conduct unlawful by statute.”
- FTC Staff Reminds Influencers to Clearly Disclose Relationship. “The FTC reviewed Instagram posts by celebrities, athletes, and other influencers. As a result, FTC staff sent out more than 90 letters. And the letters reminded influencers and marketers to conspicuously disclose their relationships to brands when promoting or endorsing products through social media. They mark the first time that FTC staff reached out directly to educate social media influencers themselves.”
Click the image to read more by lawyer Jeff Brown.