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FTC Sends Warning Letters to Clarify Social Media Marketing Guidelines

By Vera Golosker, Esq.


Ever wonder if your favorite celebrities actually love the products they're posting about on their Instagram accounts or if the posts are really a guerilla marketing campaign? Well, according to the Federal Trade Commission, consumers shouldn't have to guess. In April, the FTC sent over ninety letters to various celebrities, athletes, and other influencers warning them that they must clearly identify when brands have sponsored their social media posts. In the letters, the FTC provided some guidelines to meet its requirement that ads must be identified in a "clear and conspicuous" manner.

According to the National Law Journal, these letters went to a number of actors, singers, celebrities, and models, as well as leaders of various fashion labels, restaurant chains, and cosmetic companies. This is the first time that the FTC has directly reached out to social media influencers themselves to formally educate them on the FTC's Endorsement Guidelines. According to the FTC, both brands and social media influencers could face liability for not properly identifying a sponsored post depending on the facts, and whether the brand failed to instruct the celebrity to make the disclosure. The Endorsement Guidelines govern the use of endorsements and testimonials in advertising, including establishing for consumers if there is a "material connection" between the endorser and an advertiser that a consumer may not expect, such as a business or familial relationship, a brand providing a product for free in exchange for an Instagram post, or paying an influencer to endorse their product online. 

The FTC noted that on mobile devices, Instagram typically only displays the first three lines of a longer post unless users click "more." The FTC recommends that disclosure of material connections appear above the "more" link. The letters also noted that consumers may skip over multiple tags, hashtags or links, especially when appearing at the end of a long post, making such disclosures inconspicuous. Therefore, the disclosure should appear at the beginning of the post, if possible, and not be buried in a string of hashtags. The letters clarify that posting "Thanks [brand]," "#sp," or "#partner" is not sufficiently clear or understandable to the average consumer. Though not the only permissible manners of disclosing a sponsorship, the FTC noted that the words "ad," "promotion," or "sponsored," or hashtags like "#ad," are acceptable forms of disclosure.

For consumers, the FTC also makes it easy to file a complaint via the FTC's website. Thus, if you are an influencer, it is important to make sure to follow the Federal Trade Commission's Endorsement Guidelines when posting promotional material on social media. Pierce Law Group LLP can provide easy to follow practical advice and checklists concerning these Guidelines to assist Influencers. Pierce Law Group LLP has substantial experience in negotiating contracts between influencers and merchandisers. 

Aside from staying out of trouble with the FTC, there are a number of other considerations celebrities should consider before posting a tweet or other social media message.   For an article previously written for the Beverly Hills Bar Association in 2012 by David Albert PIerce & Anthony Hanna entitled, "Blogs, Facebook & Twitter: How Instant Communication Can Help or Hurt Celebrities" click here.   This past article continues to contain viable tips for ensuring proper social media management.