FTC INFLUENCERS UPDATE: What Brands Should Know

The Federal Trade Commission has revised its endorsement guides for the first time since 2009, in an effort to ensure business or brand endorsements used in advertising are truthful. These new rules are to make it very, very clear what a brand has paid for, and what is an ad. The guidelines also address the rising issues since AI-powered “influencers” have become more popular along with recent issues with truthful or paid-for reviews. 

A few key takeaways for brands and influencers: 

• Creators must go beyond tagging a brand in a post or using hashtags like #sponsored or #ad if it isn’t clearly visible to all users. For example, on TikTok, creators must feature the disclosure within the video itself, not just in the caption. So essentially, the fact that it’s a sponsored piece of content has to be unavoidable. 
• AI or “virtual influencers” must disclose their association with brands just like real-life influencers. 
• For product reviews, companies have to either clearly disclose when they provide some sort of incentive for users to write positive reviews on platforms such as Amazon or to stop including those reviews in their total ratings altogether.
• Companies cannot suppress negative reviews or post reviews attributed to people who don’t exist or have no experience with the products in question.
• Standard disclosures won’t work for children, who are unlikely to understand them if they’re the intended audience. However, the FTC has not released details on this front.
• The maximum civil penalty for each violation of the FTC’s provisions is $50,120.

For now, it’s important that brands and creators make it very clear their content is an ad, so announcing it in the beginning and putting it in the text along with #sponsored and #ad is needed. 

TURNER already advises brands to operate with creators along these guidelines, and out of abundance of caution, will ensure TikTok influencers disclose the content is an ad within the video itself, along with the copy/partnership label, ensuring the disclosure is loud and clear, so no guesswork is happening for the audience, or the brand.