Influencer-brand partnerships have become a vital way to expose consumers to products and services. Influencers with large, dedicated audiences have enough sway to bolster a brand or even launch a small business.
Federal Trade Commission (FTC) Guideline compliance is mandatory for any influencer marketing campaign. AD disclosures make sure influencer endorsements are transparent and that consumers can make purchasing choices based on honest information.
Below, we’ve created a quick guide to FTC AD disclosure guidelines so brands and influencers can create compliant and transparent content.
What Are AD Disclosures?
Influencer AD Disclosures are the legal obligation of influencers to inform their audiences when they are receiving compensation for a product or service endorsement. No matter the post type, platform, or device, all paid endorsements have to be clearly disclosed.
What Counts as a Paid Endorsement?
Monetary compensation is not the only way an influencer can be paid for branded content. According to the FTC, if an influencer stands to gain any type of material benefit as a result of partnering with a brand, then the partnership has to be disclosed to their audience.
Types of material benefits include:
- Financial/Cash Payments
- Commissions or Affiliate Payments
- Free Products or Services from the Brand
- Store/Brand Credit or Discounts on Products and Services
- Special/Exclusive Access
- Favors from the Brand that Benefit the Influencer
No matter how big an influencer is or the value of their compensation, sponsored content of any kind has to comply with FTC laws.
Do Influencers Have to Disclose Ads?
According to the FTC guidelines, all sponsored content has to explicitly state it’s an AD. AD disclosure protects consumers by preventing fraud and deception in advertising. Loyal followers trust their chosen influencers, giving influencers the power to impact purchase choices and the potential to impact the market. Influencers have to disclose AD content to play their role in enforcing fair business practices.
Why Do Influencers Have to Disclose Ads?
Clearly identifying a post as an ad tells followers and consumers when they’re being sold to. This plays a big role in maintaining trust between an influencer and their audience and a brand and their target consumers.
Given the amount of sway influencers have, merely using a product in a piece of content (sponsored or not) can push followers to make a purchase. However, there’s a difference between an organic endorsement and a paid endorsement. And sometimes, there’s a difference in how consumers engage with the two.
What is the Difference Between an Organic Endorsement and a Paid Endorsement?
An organic, unpaid endorsement is when an influencer endorses a product or service in their content without receiving any kind of compensation from the brand. This could look like a mom telling her followers about her favorite cleaning product that’s safe to use around children or an influencer taking their daily vitamins in a YouTube video and mentioning the brand and why they like it in passing. These organic endorsements are the most authentic because they highlight products and services that influencers like regardless of receiving compensation for a mention.
Sometimes organic endorsements can turn into paid endorsements. As a brand, if you find an influencer who already uses your products, you can partner with them to build upon the foundation of trust they’ve already developed. You can introduce new products or services in the partnership, leveraging the previous organic endorsement as a gateway to expanding your visibility.
While paid endorsements (including ones that weren’t preceded with organic engagement) are a great way to introduce influencers and their followers to your products and services, paid endorsements aren’t organic. Influencers might not engage with a product or service without the compensation, and knowing this can affect the weight and credibility of the endorsement in the eyes of consumers. Failing to disclose that a piece of content is an AD could deceive a consumer into making a purchase they wouldn’t otherwise make.
How Brands and Influencers Can Make Sure Their Content Follows FTC Guidelines and AD Disclosure Laws
While the FTC does not regulate AD language, the industry standard is that clearly visible disclosure is mandatory in all sponsored content.
Influencer AD Disclosure Language
Using the term “AD”, “sponsored”, or “paid partnership” in the content and/or as hashtags is acceptable. Influencers can also include a clear statement thanking the brand directly, citing the free product featured in the post or mentioning them as the sponsor for the piece or portion of content.
Influencer AD Disclosure Placement
The FTC recommends influencer marketing campaigns feature AD disclosures where it’s hard to miss. Best practice is to put the disclosure in the beginning of the content. For example, a lot of influencers will put #AD at the beginning of their post caption, or their first line will mention the sponsorship or partnership with the featured brand in explicit terms.
Disclosure has to appear before any links to or recommended purchase of endorsed products. It’s also advised that influencers include more than one mention of the paid partnership throughout the content, especially in videos or livestreams.
Influencer AD Disclosure Clarity
Vague terms like “collaboration” or “partnership” do not meet FTC guidelines for AD disclosures. These words do not clearly convey the presence of a benefit for the influencer.
For more detailed information on how to comply with FTC Guidelines for AD disclosures, check out Disclosures 101 for Social Media Influencers.
Influencer AD Disclosures Are Not the Sole Responsibility of Influencers
As a brand, you have a responsibility to include AD disclosure guidelines in your campaign brief. While influencers do have a responsibility to disclose paid partnerships, brands are also responsible for reviewing content to make sure the disclosure is present before approving publication or release.
One of the major benefits of compliant AD disclosures is that the engagement derived from the influencer marketing campaign will be authentic and accurate. As mentioned above, paid partnerships can influence a customer’s purchasing decision. Instead of getting dead traffic to your brand as the result of a non-disclosed partnership, transparency will bring you genuinely interested customers and – ideally – sales.
Work with Sway Group
Sway Group is a full-service influencer marketing agency. We recruit vetted, high-quality influencers and foster impactful partnerships between influencers and brands. Our Quality Assurance team guarantees FTC compliance for all partnership content, and we believe direct evaluation is more accurate and insightful than automated quality checks.
If you’re interested in leveling-up your next influencer marketing campaign, contact us today!