The FTC saga continues. Questions still remain on how the FTC Guidelines will impact on influencer marketing. Recent publicity has sent shudders through the industry, with concerns that the recent FTC scrutiny will make it harder for brands to work with influencers.
We’ve looked at the topic a couple of times this year. We first mentioned the April clampdown in FTC Threatens Instagram Influencers. “You must mention #ad”, where we discussed how the FTC sent out warning letters about a lack of transparency. More recently, we discussed Instagram’s response to the situation, with their creation of their Instagram Paid Partnerships Disclosure.
Some have suggested the arrival of ad-transparency is not such a good thing, however, this is not the case. Influencer marketing has been going a long time and audiences tend to suss when an influencer is being paid. As a result, influencers are actually more respected when they are being transparent with their audience.
The FTC Guidelines Are Not New
The FTC Guidelines actually pre-date influencer marketing. Their proper title is the Guides Concerning Use of Endorsements and Testimonials in Advertising, and they began life in 2000.
The FTC has continued to update their guidelines since then. At the beginning, their main focus was on paid celebrity ads, predominantly on television or in print.
By 2009 social media was becoming more common and the FTC updated their guidelines to allow for situations where celebrities and other influencers make paid statements about products on social media.
The FTC pursued a couple of legal cases against Sony in 2014 and Microsoft and Machinima in 2015 which resulted in them making further changes to the FTC Guidelines.
The focus of the guidelines remained unchanged throughout this whole period, however. They have always emphasised that if firms pay celebrities or experts to promote their product in any way, this needs to be disclosed to the consumers who see the ads. The changes over the years have simply been to adapt the FTC Guidelines to cover newer forms of advertising media.
The second focal point of the guidelines is that influencers need to tell the truth – as far as they know. This is in many ways more relevant for the current micro-influencer than it is for celebrities. Justin Bieber, for example, would be expected to be less likely to know the stickability of a type of paint he promoted than an influencer in the home decoration niche would.
Ignoring The Rules
Although the FTC Guidelines were being updated on a regular basis, celebrity endorsers and the brands they worked with tended to ignore them. For years, the FTC took a hands-off approach, focusing their attention elsewhere.
It got to the point, though, when they couldn’t ignore the flagrant breach of the rules. An agency took a sample of 50 celebrities on Instagram earlier this year and discovered that only 7% of them appeared to comply with the FTC Guidelines.
The FTC Warnings
This April, the FTC decided that people must play by the rules. Although much of the reporting suggested that they had come down heavily on influencers, the reality is that they simply sent letters to a combination of influencers. They were also sent to various marketers, who have never been publicly identified.
These were educational letters, reminding the recipients about the FTC Guidelines, and the FTC’s expectations regarding influencer marketing. The letters did make a special mention of problems faced in Instagram, where influencers were often trying to comply with the rules, perhaps by using a #sp tag, but where the end result was that their followers were confused. The letter also highlighted the need to ensure that any disclosure in Instagram has to be placed near the beginning of a post. It must not hidden behind a ‘More Here’ link.
Repercussions of the Fyre Festival
The situation was compounded in April by the disastrous Fyre Festival which had received plenty of publicity from predominantly celebrity influencers (in most cases without anything to suggest that these were issuing paid posts). With many attendees losing a considerable sum of money, passions became flamed, and people started to blame the people on whom they had relied when they decided to buy tickets. It was only after the event that these celebrities admitted that they had been paid to promote the festival.
What Do the FTC Guidelines Mean For Influencer Marketing?
The guidelines mean that you can’t hide the fact that influencer marketing is some form of promotion. The FTC expects all promotions to be upfront and honest. If an influencer publishes a post promoting a product for which they receive any form of compensation they should clearly state that fact.
But that shouldn’t be a problem. In the case of celebrities, it is unlikely to come as any surprise to consumers that celebrities get paid. This is certainly the case for products which the celebrity would be unlikely to use themselves. On the other hand, in cases like the Fyre Festival promotion, the paid endorsements were not so obvious.
The supporters of micro-influencers may be more surprised that their heroes receive payment for product promotion. But when it comes down to it, the influencers gained their status because of the trust they have built up with the audience. As such, the followers will still take notice of sponsored posts, because they usually believe that the influencers will only promote products that they personally believe in. If they don’t, they are unlikely to keep their influential status for long. The FTC Guidelines are genuinely not something for brands to fear at all. Audiences of influencers will appreciate the influencer more if they are entirely transparent.