4 Things Marketers Should Know About the FTC’s Latest Crackdown on Influencer-Driven Social Media

Here are the basics of what you can and cannot do

The FTC's guidelines fine-tune branded content.
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Do you know the difference between an #ad, #sponsored content and a brand #partnership?

As more brands turn to influencers to crank out social media posts, the Federal Trade Commission updated its endorsement guidance last month, giving more clarity into what specific language creators can and cannot use when working with brands on sponsored content.

Ellie Altshuler, an attorney at Nixon Peabody, recently explained a handful of the changes that marketers should be aware of while speaking during an Advertising Week panel. Here’s a quick rundown of what brands and the content creators that they work with should know.

1. Clever hashtags don’t cut it

There are still a lot of grey areas in the language that the FTC deems OK in distinguishing ads from regular content, but the latest round of recommendations does pin down two recommended hashtags for paid content: #ad and #sponsored. Per the government agency, both hashtags make it super clear that a person is working with a brand without leaving any wiggle room for interpretation.

“We know that the influencer has a relationship with the brand—whether they’ve been paid or received a gift or they’re an employee or even the owner—there has to be a disclosure that it’s paid,” Altshuler said.

Beyond #ad and #sponsored though, wording gets tricky but Altshuler deciphered a few other common hashtags that the FTC recently ironed out.

“Then the FTC went on and said [that] #sp, #spon, #partner and #partnership—that’s not sufficient,” she said. “They further went on just recently to say that ‘thanks to’ also doesn’t work, unless it’s crystal clear where you say, ‘thanks to X brand for [giving me] my sweet car.’”

While the language does help the FTC crack down on content that blurs the line into advertisements, influencers are not necessarily happy about the changes.

Mary Orton, a fashion influencer, editor of the blog Memorandum and co-founder of the mobile app Trove, also spoke on the panel about why she feels like #ad and #sponsored are limiting and inaccurate in describing how she works with brands.

“Across the board, my hope is that the FTC’s lexicon evolves,” she said. “If their goal is to inform the consumer and make sure that there is that transparency to the consumer using words like ‘ad’ and ‘sponsored,’—which are rooted in traditional media—I don’t think that paints a clear picture to consumers.”

Orton frequently works with brands on Instagram, where she has 129,000 followers. Within the past month, she’s posted sponsored content for Macy’s and Polo Ralph Lauren, luxury retailer Adriana Online and home furnishing brand Perigold, labeling such posts with #ad.

According to Orton, all the brands she works with are “actually something that I use,” and are a different twist on partnerships than consumers are accustomed to seeing on TV or in magazines. Therefore, she said digital partnerships should be treated differently than traditional media buys.

“I think that likening what I do on my blog and social channels to what the general populous of what an ad is—an ad on TV or a billboard ad or a print ad—is not an accurate depiction of how I work with brands at all,” she said. “[My viewers] know my voice and they know that today I might have a sponsored post with Tory Burch but they also know that I’ve been wearing Tory Burch for years.”

2. There is no such thing as free lunch

Brands are known for sending free products and samples to influencers but Nixon Peabody’s Altshuler warned that creators may soon have to label their posts as ads with the same language that they do with full-blown campaigns.

“There will likely be a shift very soon when even the freebies that you’re getting from the brand will also need to have disclosures next to them,” she said. “The FTC has not been totally explicit on that but they have been hinting at that.”

3. Definitions vary by platform

Complicating matters further is the fact that each platform treats influencer marketing differently.

Facebook, for example, added new branded content resources in March while Instagram began offering creators subhead tools to label their posts in June. Those tools do not address the FTC’s guidelines though and also do not account for content posted to other social platforms. There is not a standard across all platforms.

“The FTC specifically said, ‘It’s great that Facebook is following but just because they have created these tools does not mean that they’re necessarily being compliant,” she noted. “Until the FTC creates universal guidelines for every platform, I think it’s going to continue to be the Wild, Wild West.”

4. Celebs aren’t like the rest of us

Even as the FTC is working to clear up the murkiness around influencer marketing, don’t expect Jennifer Aniston to abide by the same rules when she posts something about Smartwater, which is a brand that the actress has a long-running sponsorship with.

For those types of deals, celebs don’t have to use hashtags because it’s implied that they’re being paid, per the FTC. “Product placements are such a traditional thing on its own,” Altshuler said.

According to the FTC, all users—whether celebrities or social media stars—should clearly label their paid posts as ads. Determining whether someone needs to disclose an ad depends on if a “significant” portion of someone’s followers understand that it’s an ad. “Determining that could be tricky, so we recommend disclosures,” reads the FTC’s wording.

When talking about reality TV stars, Altshuler said, “Arguably, the [definition] of celebrity from the FTC should apply to them because everyone knows that they’re getting paid [and] that there’s some kind of relationship with the brand.”

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