Note from the editor: While our focus continues to be on marketing research, Alert!’s editorial staff recognizes the value in occasionally including content specific to other areas of an organization (e.g., branding, marketing) that typically have a tie to or involvement with marketing research departments and or processes. While these FTC's guidelines are limited to marketing, i.e., exclude marketing research, it might be worth understanding what the implications are for social media marketing, to further your own education or that of someone in your organization.
The Federal Trade Commission (FTC)’s guidelines for making disclosures in digital advertising have been around now for 15 years; however, recent updates have major implications for social media marketing.
These new guidelines, which seek to clarify what constitutes appropriate practices for sponsored content, signal the end of the wild west, “anything goes” days of influencer marketing on social media and likely set the stage for FTC action against offending parties.
Many of the guidelines clarify situations that should be obvious: being limited to 140 characters isn’t an excuse for non-disclosure; sponsored celebrity posts on social must explicitly state that they are sponsored; bloggers must disclose if they received anything of value for the post; disclosures in video content must come at the beginning; and reviews must note if there was any sort of incentive.
However, outside of these more obvious guidelines, there were some more subtle wildcards tossed in by the FTC.
Purchasing fake likes and followers is considered deceptive advertising
Shortly after Newt Gingrich referenced his 1.3 million followers as a signal of strong support for his presidential bid, several data analysts crunched the numbers and found that between 80–92 percent of his followers were likely fake.
However, Mr. Gingrich isn’t the only one who has been caught trying to inflate an image with fictitious fans. Major brands, celebrities and other politicians have all been caught doing the same.
The new FTC guidelines declare that the agency sees the practice of buying and selling likes as a clearly deceptive practice that provides false information to consumers about the reputation, quality and or popularity of the company. The FTC goes on to say that “...both the purchaser and the seller of the fake ‘likes’ could face enforcement action.”
Images alone, even if not intended to be promotional, can be considered endorsements
When Taylor Swift appears in a print ad for Diet Coke, it is clear that she is a paid spokeswoman for the product. However, according to the FTC, that relationship would be less obvious and require disclosure if the pop star posted a picture of herself enjoying a Diet Coke to her personal Instagram feed.
This guideline might raise eyebrows for possibly going too far. Yet, whether marketers agree or disagree, the FTC has now laid out clear guidelines that require disclosure of a paid relationship, even for images that may not be intended as promotional.
As the FTC outlines, “Simply posting a picture of a product in social media, such as on Pinterest, or a video of you using it could convey that you like and approve of the product. If it does, it’s an endorsement.”
The guidelines go on to state, “If your audience thinks that what you say or otherwise communicate about a product reflects your opinions or beliefs about the product, and you have a relationship with the company marketing the product, it’s an endorsement subject to the FTC Act.”
Translation: If someone is being paid to endorse a product and they post an image or a video that could in any way be perceived as approval of said product (or company), then the nature of that relationship must be disclosed.
Trading contest / sweepstakes entries for endorsements requires disclosure
Prior to this latest update, the FTC actually took action against Cole Haan for running a contest that the agency felt created incentivized endorsers. The contest not only required entrants to create Pinterest boards showcasing Cole Haan products, but to also include “#WanderingSole” in the description.
How was this deceptive? The FTC believed that “... participants’ pins featuring Cole Haan products were endorsements of the Cole Haan products, and the fact that the pins were incentivized by the opportunity to win a $1,000 shopping spree would not reasonably be expected by consumers who saw the pins.”
Yet, in accordance with the recent FTC guidelines, had Cole Haan simply “[made] the word ‘contest’ or ‘sweepstakes’ part of the hashtag,” it would have provided the information necessary to alert third parties that the Pinterest boards they were viewing were incentivized endorsements.
In essence, #WanderingSole was unacceptable, but #WanderingSoleContest would have saved Cole Haan a lot of trouble.
Staying within the lines of FTC guidelines
Above all, the latest FTC guidelines seek to define what deceptive advertising means when it comes to digital media and what must be disclosed in order to avoid running afoul of the regulations…which happens to be nearly everything.
For brands, the responsibility to ensure that all of the brand’s social arms are within FTC regulations falls on the shoulders of the companies themselves. As the FTC notes, “delegating part of your promotional program to an outside entity doesn’t relieve you of responsibility under the FTC.”
It’s important for brands to know that, even if a marketing or public relations agency is doing the brunt of the social media posting, any failure to uphold FTC regulations will ultimately be the responsibility of the organizations themselves.
As far as agency work goes, these new guidelines can be both a threat and an opportunity. If not upheld, these regulations have the potential to damage a marketing or PR firm’s reputation. However, for agencies that live up to the FTC’s expectations, it can help to foster a more transparent company-customer relationship.
With the exception of the few wildcards detailed above, most of what the FTC put forth is fairly straightforward. Fundamentally, the rule seems to be that if there could be any question regarding whether the majority, or minority, of those that come in contact with the content fully understand that a relationship of mutual benefit exists between endorser and the product, then it must be disclosed.
Simply put, when in doubt, call it out.