Social Media, Influencers, and Endorsements: An Excerpt from the Advertising Law Tool Kit

Join us as we spotlight select chapters of Venable’s popular Advertising Law Tool Kit, which helps marketing teams navigate their organization’s legal risk. Click here to download the entire Tool Kit, and tune in to the Ad Law Tool Kit Show podcast, to hear the author of this chapter dive deeper into the issue of social media, influencers, and endorsements in this week’s episode.

Advertisers increasingly view social media as an opportunity to have influencers speak positively about their products and services. The Federal Trade Commission (FTC) has made it clear, however, that the rules regarding disclosure of material connections also apply in the social media context. Indeed, the FTC recently updated its Guides Concerning the Use of Endorsements and Testimonials in Advertising to clarify them and address questions triggered by new technologies (such as computer-generated influencers) and platforms. Over the years, the Commission has pursued numerous cases against influencers, agencies, and the companies that hire them.

The use of social media to generate product endorsements generally falls into three categories: (1) supplying free product or other consideration to a social media influencer; (2) paying a social media influencer to write about your product or services; and/or (3) encouraging your employees to talk about your products or services on social media. In each of these instances, disclosure of the connection between the brand and the social media influencer is critical.

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• If you send free products to social media influencers for them to try and write about, or you pay them to write about your company or your competitors, make sure they disclose the gift or compensation. There are no magic words, but simple disclosures often work best, such as “X Company gave me a free product to try.”
• The same rule applies to endorsers or celebrities who are paid to post or tweet about your product or services. Hashtags like #ad, #sponsored, and #[BRANDNAME] ambassador are likely effective in conveying that it’s an ad. The FTC believes that #spon and #sp are not. If you are marketing to kids, you may need to be even clearer.
• The disclosure of compensation, a gift, or other connection to a brand has to be right up front, ideally at the start of a post, but in no event should it appear only after a reader has to click “read more.” Don’t place the disclosure at the end or the middle of a string of hashtags, where it is unlikely to be noticed and appreciated.
• Establish a program to periodically remind your employees that they must disclose their connection to the company if they use social media to discuss your products or services. Additionally, all statements they make must be truthful and substantiated.
• Incentivizing consumers to “like” or “tag” your product or service in some fashion may trigger a disclosure requirement. The FTC has said that if a social media platform doesn’t allow or permit advertisers to post disclosures, you shouldn’t incentivize endorsements on such platforms.
• Social media posts that are made as part of a contest entry must disclose that they are being made as part of a sweepstakes or contest. The FTC has warned against using abbreviations like #sweeps in lieu of #sweepstakes or #entry, because there is not enough evidence that consumers understand what that means. Instead, according to the FTC, disclosures like “[BRAND]SWEEPSTAKES” should be used.
• If you are using videos as part of your social media strategy, any disclosure must be made in the video itself, right at the start, and not in the video description.
• For photo-only platforms, disclosures should be superimposed directly on the photo to ensure the disclosure travels with the photo if it is shared.
• Keep in mind that while the disclosure mechanisms built into the social media platforms are attractive, the FTC says you can’t assume they are sufficiently clear and conspicuous.
• Advertisers are responsible for what their social media influencers say. Adopting a social media influencer policy, making reasonable efforts to monitor what they are saying, and taking prompt action if any problems are found will help prevent regulatory problems.
• Similarly, if you use third parties, such as agencies or third-party review platforms, to implement your social media strategies, they should be monitored for compliance.

To learn more about social media, influencers, and endorsements, contact Melissa Steinman. For more insights into advertising law, bookmark our All About Advertising Law blog and subscribe to our monthly newsletter.