The Federal Trade Commission (FTC) recently announced it was cracking down on improperly-labeled native advertising and disclosures on paid social media posts.  In April, the FTC sent out more than 90 letters reminding influencers and marketers that influencers should clearly and conspicuously disclose their relationships to brands when promoting or endorsing products through social media.

The FTC’s Endorsement Guides provide that if there is a “material connection” between an endorser and an advertiser – in other words, a connection that might affect the weight or credibility that consumers give the endorsement – that connection should be clearly and conspicuously disclosed, unless it is already clear from the context of the communication. A material connection could be a business or family relationship, monetary payment, or the gift of a free product. Importantly, the Endorsement Guides apply to both marketers and endorsers. – FTC

So, did the letters make a difference?  Apparently not, according to study done by Mediakix.  Mediakix tracked the top 50 celebs on Instagram and culled through their accounts for a month.  Here’s what they found:

Only 7% of the potential sponsored posts are FTC complaint.  93% may not be compliant.

COMPLIANT
SOURCE:  Mediakix

“In one year,” said the study, “a top celebrity will post an average of 58 sponsored posts and only 3 may be FTC complaint.”


 

Here’s the letter the FTC sent out in April:

Dear {Influencer}:

The Federal Trade Commission is the nation’s consumer protection agency. As part of our consumer protection mission, we work to educate marketers about their responsibilities under truth-in-advertising laws and standards, including the FTC’s Endorsement Guides.

I am writing regarding your attached Instagram post endorsing {product or service}. You posted a picture of {description of picture}. You wrote, “{quotation from Instagram post}.”

The FTC’s Endorsement Guides state that if there is a “material connection” between an endorser and the marketer of a product – in other words, a connection that might affect the weight or credibility that consumers give the endorsement – that connection should be clearly and conspicuously disclosed, unless the connection is already clear from the context of the communication containing the endorsement. Material connections could consist of a business or family relationship, monetary payment, or the provision of free products to the endorser.

The Endorsement Guides apply to marketers and endorsers. [If there is a material connection between you and {Marketer}, that connection should be clearly and conspicuously disclosed in your endorsements.] or [It appears that you have a business relationship with {Marketer}. Your material connection to that company should be clearly and conspicuously disclosed in your endorsements.] To make a disclosure both “clear” and “conspicuous,” you should use unambiguous language and make the disclosure stand out. Consumers should be able to notice the disclosure easily, and not have to look for it. For example, consumers viewing posts in their Instagram streams on mobile devices typically see only the first three lines of a longer post unless they click “more,” and many consumers may not click “more.” Therefore, you should disclose any material connection above the “more” button. In addition, where there are multiple tags, hashtags, or links, readers may just skip over them, especially where they appear at the end of a long post.

If you are endorsing the products or services of any marketers with whom you have a material connection, you may want to review the enclosed FTC staff publication, The FTC Endorsement Guides: What People are Asking. I’m also enclosing a copy of the Endorsement Guides themselves. (Both documents are available online at business.ftc.gov.)

If you have any questions, please contact Mamie Kresses. Thank you.

Very truly yours,

Mary K. Engle Associate Director Division of Advertising Practices

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