Important news for brands and influencers alike: The Federal Trade Commission (FTC) has rolled out some significant updates to its endorsement and review guidelines. That includes final revisions to the Endorsement Guides and a proposed new Rule on the Use of Consumer Reviews and Testimonials.
Whether you’re navigating the roles of virtual influencers, deciphering what “clear and conspicuous” really means for disclosures, or fretting over the potential liability of ad agencies, the new FTC influencer guidelines might feel like a regulatory minefield. But here’s the kicker: as complicated as compliance might seem, failing to adapt to these changes could be an even bigger headache. With the prospect of civil penalties on the horizon, it’s more crucial than ever to get things right.
Luckily, we’re here to guide you through these new guidelines and proposed rules, so you can continue to influence ethically and effectively. Stick around as we unpack these complex changes and tell you how to stay ahead of the curve.
2023 Updated FTC Influencer Guidelines
- What is an Endorsement?: The FTC has broadened what counts as an endorsement. Now, even statements by virtual influencers, tags on social media, and photos without commentary could be considered endorsements. (From the FTC’s What People Are Asking resource: “Simply posting a picture of a product on social media, such as on Pinterest, or a video of you using it, could convey – even without words – that you like and approve of the product.”)
- Be Clear and Conspicuous: The “clear and conspicuous” point in the new FTC guidelines is all about making sure that any disclosure — like letting people know an endorsement is actually an ad — is super obvious and easy to understand. In the world of scrolling and swiping, the FTC wants these disclosures to be “unavoidable.” That means you can’t bury the disclosure in the fine print, at the bottom of a post, or make it the same color as the background. Text disclosures still need to appear before a “read more” is clicked to count.
- Get Even More Specific with Your Hashtag Disclosures: The FTC is now being more prescriptive than ever about distinguishing multiple words within disclosure hashtags.
- Example: “#XYZ_Ambassador” or “#XYZ_Partner” with the underscore between the words is a recommendation now instead of “#XYZPartner”.
- The word, ad, in a hashtag is not acceptable (example: “coolstylead”) because “ad” as a word is so short. It is not as noticeable or understandable to people when it is grouped with other words in a hashtag. Only “ad” by itself is still allowed.
- Speak Your Disclosure Out Loud: As the Endorsement Guides say, if the endorsement is made through visual means, the disclosure should be made at least visually. If the representation is made audibly, the disclosure should be made at least audibly. And if the representation is made through both visual and audible means, the disclosure should be made both visually and audibly. A disclosure presented simultaneously in both the visual and audible portions of an ad is more likely to be clear and conspicuous.
- Everyone’s Responsible Now: The “everyone’s responsible” directive from the FTC throws a spotlight on the fact that it’s not just the advertiser who’s on the hook for deceptive or misleading ads — everyone involved in the advertising process could face liability. That means ad agencies, public relations firms, and even influencers could be held responsible if they’re part of creating or distributing content that turns out to be misleading.
- Ads for Kids: The FTC is signaling that the agency is taking a closer look at how products and services are marketed to younger audiences. While the guidelines are somewhat vague at the moment, the FTC has made it clear that practices that might be okay for adult-targeted ads won’t necessarily fly when kids are the intended audience. This likely means stricter rules for clarity, disclosure, and the overall presentation of information. Although the FTC hasn’t released detailed guidelines yet, they’ve indicated that this is an area they will be addressing in greater depth in the future. It’s a heads-up that companies and influencers need to exercise extra caution when creating content aimed at children.
- Be Honest About Results: It’s not enough anymore to slap on a “results not typical” disclaimer if the outcome shown in the ad isn’t what most people would experience. The FTC is requiring companies to be proactive in communicating what the average consumer should realistically expect. So, if you’re endorsing a weight loss product and you lost 30 pounds in a month, but most people only lose 5 pounds, that needs to be clearly communicated.
- Free Stuff for Reviews: If companies give you free products to write a review, they must also let you know it’s okay to write a negative review without any backlash. And they have to make it clear that your review was incentivized. (“If you receive free products or other perks with the expectation that you’ll promote or discuss the advertiser’s products in your blog, the FTC Act applies to you.”)
- Don’t Mess with Reviews: The new guidelines make it clear that messing with customer reviews (like deleting negative ones, or only showing the positive ones) is forbidden. If a company offers perks for positive reviews, they have to make that super clear. But even then, if those incentivized reviews bump up the product’s overall rating, that could be misleading. Other key points under this topic include:
- Employers are responsible for what their employees say in reviews and should keep an eye on that.
- Fake negative reviews about competitors, even if not considered endorsements, can be actionable as deceptive practices under Section 5 of the FTC Act.
- New Proposed Rule: On top of these new guidelines, the FTC wants to introduce a new rule that could fine companies for things like fake reviews and undisclosed sponsorships. Under this rule, companies won’t be able to use reviews by fake entities or people who’ve never used the product. They also can’t offer incentives for only positive reviews; if there’s any kind of reward for a review, it has to be disclosed. On top of that, companies would be prohibited from suppressing negative reviews or failing to disclose a relationship between them and the reviewer. Practices like “review hijacking” and selling fake followers would be off-limits too. And here’s a futuristic twist: the FTC is even concerned about how AI could be used to generate fake but realistic-looking reviews. If this rule becomes law, violating any of these points could lead to civil penalties.
While this new FTC landscape may seem daunting, understanding these points can help you stay on the right side of the law. It’s critical to stay up to date with the most current FTC regulations, but that doesn’t mean you have to spend your time combing through complicated government documents: we’re here to guide the way.
At Sway Group, we’ve been mastering the art of influencer marketing for over 12 years, while always adhering to the intricate rules and regulations of the industry. When you work with us, you can count on transparent and ethical campaign content that resonates with your target audience — while staying in full compliance with all FTC influencer guidelines. Contact Sway today to strategize your next (FTC-compliant) influencer marketing campaign.