Disclosures: The Art of Covering Your Ass
In order to keep a level playing field for brands and provide protection for consumers, the Federal Trade Commission (FTC) has put regulations in place for advertising to ensure that companies play by the rules. We have created a guide for all you need to know to ensure that you’re covered and that you can confidently inform your clients even when they aren’t aware.
Here are the FTC guidelines for sponsored content.
“Clear and Conspicuous”
The basic question you should ask yourself when creating a caption for a sponsored post is “Could anyone mistake this for a non-sponsored, organic post?” If the answer is yes, then your disclosure is not sufficient. The FTC requires that disclosures be “clear and conspicuous.” Clear meaning you can’t mistake it for an organic ad. Conspicuous meaning you can’t miss it.
Thinking of burying your disclosure tag in a second comment amongst a bunch of other tags? You might want to think again. The FTC guidelines clearly discourage that:
“Preferably, design advertisements so that “scrolling” is not necessary in order to find a disclosure. When scrolling is necessary, use text or visual cues to encourage consumers to scroll to view the disclosure.”
In short these are the FTC’s criteria for gauging whether your message is clear and conspicuous:
- close to the claims to which they relate;
- in a font that is easy to read;
- in a shade that stands out against the background;
- for video ads, on the screen long enough to be noticed, read, and understood;
- for audio disclosures, read at a cadence that is easy for consumers to follow and in words consumers will understand.
You can read the full text of the FTC's rules here.
No false claims
Brands cannot make false claims about their products in any kind of advertising. This rule applies to influencer content as well. If the tea can’t really help you detox or the strips can’t really whiten your teeth, you’re not allowed to purport that they can. Furthermore, disclosures do not absolve false claims: “A disclosure can only qualify or limit a claim to avoid a misleading impression. It cannot cure a false claim.”
Example: If the whitening strips do not work, you cannot make a video showing your before and after sparkle teeth and praising how well the white strips work and then put in a disclosure saying “this is sponsored, these don’t actually work.”
If you are choosing to partner with brand and create sponsored content for products that you believe in, you’re off to a good start. Most content creators will not partner with brands whose products are a poor lifestyle fit or whose products they would never actually consume. If you believe in the product you are endorsing, your content will be much more meaningful to both your audience and the brand and you can be comfortable that the claims you’re making (if any) are truthful.
.The FTC provides these 3 guidelines for avoiding false claims:
- You can’t talk about your experience with a product if you haven’t tried it.
- If you were paid to try a product and you thought it was terrible, you can’t say it’s terrific.
- You can’t make claims about a product that would require proof the advertiser doesn’t have
This last one deserves a little more examination.
Example: The fit tea company sends you their product. They make no claims that the product cures 'stomach problems', but you start drinking the tea and swear that all of your stomach issues go away. Since the brand cannot provide proof that the product cures stomach problems, you cannot claim that the tea cures stomach problems. You can describe your experience and your testimony that you found the tea helpful for you, but you cannot claim that the tea is a cure for the stomach problems.
What disclosures are allowed?
The important point is to get the point across to your audience that the brand is compensating you for the post. There is no single correct way to do this.
In their guide, the FTC outlines these two options for statements as a way of properly alerting your audience that the brand has provided you with products to post about:
- “Company X gave me this product to try . . . .”
- “Some of the products I’m going to use in this video were sent to me by their manufacturers
However, if you’re receiving both product and additional compensation, then the likelihood is increased that you will give a favorable review. The addition of compensation beyond product trial could bring into question the validity of your review. This makes disclosure especially important. The FTC’s guidance is to make the audience aware of the nature of your relationship with the brand.
What about social channels with character limits?
“The FTC isn’t mandating the specific wording of disclosures. However, the same general principle – that people get the information they need to evaluate sponsored statements – applies across the board, regardless of the advertising medium. The words “Sponsored” and “Promotion” use only 9 characters. “Paid ad” only uses 7 characters. Starting a tweet with “Ad:” or “#ad” – which takes only 3 characters – would likely be effective.”
You’ve seen all the different, creative ways that people are disclosing in social posts. Here are a few that we’ve seen:
- “I’m partnering with @brand…”
- “I’m working with @brand…”
- “Thanks to @brand for the products…”
The only two hashtag versions that seem to fully cover your ass are #ad and #sponsored-- these are the briefest ways to declare that you are receiving financial compensation as well as products for your post.
Make sure to read the consequences section for good examples of people who thought they were disclosing and discovered that the FTC thought otherwise…
So what if you don’t disclose your involvement with a brand? What could happen?
The FTC has been cracking down on companies and influencer marketing agencies that do not have disclosures included in the posts made on their behalf.
Two anecdotes from recent memory:
- Lorde & Taylor’s now-famous blogger campaign that featured 50 women endorsing one dress without disclosure of their sponsored relationship. The campaign was outrageously successful, with the dress quickly selling out. This success may have called the attention of the FTC who filed a complaint against the brand. The FTC will be babysitting Lorde & Taylor’s marketing efforts from here on out to make sure that they don’t violate the rules again.
- Warner Bros paid people to promote a new video game without properly disclosing their affiliation with the brand. The brand directed influencers to “place sponsorship information in the text of the description box – that’s the collapsed box just below a YouTube video – not in the video itself.” The FTC caught wind of this and the brand was reprimanded. The settlement included steps to ensure that the brand is “educating influencers regarding sponsorship disclosures, monitoring sponsored influencer videos for compliance, and, under certain circumstances, terminating or withholding payment from influencers or ad agencies for non-compliance.”
These brands will have the FTC looking over their shoulder at every turn for future violations. But what could happen to the individual content creator involved with a deceptive program?
In the case of Warner Bros settlement it is clear that the FTC could require that a brand or agency withhold your payment. Queen of the internet, Kim Kardashian was reprimanded by the FTC for a post she made to promote a morning-sickness pill during her pregnancy. Kardashian stated in her caption that she was “excited and happy to partner” with the brand. The FTC did not deem this a clear enough statement about her financial relationship with the brand.
Advertising Attorney Linda Goldstein with the law firm Manatt, Phelps & Phillips speculates that the FTC could pursue legal action against Kardashian for misrepresenting the drug in an ad. As of the writing date, we are not aware of any legal action taken against individual influencers, the FTC has an ad nauseum list of actions it can take in legal response to rule breakers-- including adjudication and litigation. We recently reported that the FTC has issued warnings to 90 influencers. So the first shots have been fired. They have clarified the importance of "clear and conspicuous," indicated that they will be holding influencers personally responsible, and also eliminated some of those sneakier disclosure language choices.
Influencer marketing is still pretty new and some brands are just trying it for the first time. You may find yourself in the position to help your clients understand the FTC guidelines. This is a great example of taking a partnership role with a brand to a more valuable level. Arm yourself with knowledge to protect yourself and your clients.
Creative Community Director at Snapfluence.
There is often a pen stuck in my hair.