Last week, the Federal Trade Commission sent warning letters to two trade associations and a dozen influencers that the trade associations had hired, warning them that the influencers' social media posts failed to include proper disclosures about their relationship to the trade associations.
According to the FTC, two trade associations, the American Beverage Association and The Canadian Sugar Institute, hired influencers to promote the safety of the artificial sweetener aspartame or the consumption of sugar-containing products. The FTC alleged, however, that, in their social media posts on Instagram and TikTok, the influencers either failed to disclose their connection to the trade associations or they included disclosures that the FTC considered to be inadequate.
Following the FTC's recent update to its “Guides Concerning the Use of Endorsements and Testimonials in Advertising,” these warning letters are important to pay attention to, since they provide specific guidance about the types of “material connection” disclosures that the FTC is looking for in connection with influencer posts.
Here are some key take-aways from the warning letters.
- In what should come as a surprise to no one these days, if there is a material connection between an advertiser and an influencer that is not obvious to the audience, that connection should be clearly and conspicuously disclosed.
- The FTC also reiterated its position on what it means for a disclosure to be clear and conspicuous; the disclosure must be “difficult to miss” and must be “easily understandable by ordinary consumers.”
- When an influencer's social media post includes a video, the FTC expects that the “material connection" disclosure appear in both the post's text description and in the video itself, such as by “superimposing much larger text over the videos.” The FTC explained, “Viewers can easily watch a video without reading disclosures in a post's text description.” While this is not the first time we're hearing this, advertisers should pay close attention to this guidance – since the FTC is highlighting the fact that it expects a double disclosure in social posts that include both a text post and a video.
- The FTC also said that the disclosures that influencers' use in videos should be in the same format that the endorsements are given. That means, for example, that if the influencer provides an endorsement in both the audio and video, then the disclosure should appear in the audio and video as well. While this is not new guidance as well, advertisers should play close attention to this aspect of the warning letters, since it's not common practice by any means for influencers to make audio “material” connection disclosures.
- Brands and influencers also need to make sure that disclosures that are used in the text description of the post are immediately visible, without having to expand the post. Since the text portions of posts are often truncated to only the first two or three lines, the disclosure will need be made very early on in the text, so that it's visible even when the post is truncated.
- The FTC also doesn't think that a disclosure that only appears in the text description of a TikTok video or an Instagram Reel is clear and conspicuous, since the text “is in small print, at the bottom of the screen, sometimes poorly contrasting, and doesn't stand out.” What the FTC is saying here is that if a disclosure is needed in a video, it had better be prominently included.
- While the FTC has in the past questioned whether the “Paid Partnership” tools offered by social media platforms is a sufficient “material connection” disclosure, in the warning letters, the FTC came out with one of its strongest statements to date that they do not. The FTC explained, “We think it is too easy for viewers to miss seeing the ‘Paid Partnership’ disclosure in these posts.”
- The FTC also emphasized that consumers viewing influencer posts need to understand not only that the post is sponsored, but by whom it was sponsored. Here, the FTC was concerned that disclosures such as “#ad” and “#sponsored” were not sufficient because it wouldn't be obvious to consumers who was actually sponsoring the posts. The FTC even said that a post that identified the sponsor as “ameribev” or "cndnsugarnutr”" was not sufficient, since many viewers may not understand what that means. The FTC also said that the references to an aspartame website or a hashtag such as “#safetyofaspartame” were not sufficient to communicate that the posts were sponsored by a trade association.
Don't assume that just because the FTC sent warning letters here that the FTC is planning on less aggressive enforcement in this area. In fact, it's probably the opposite. These warning letters put the trade associations (and the influencers) on notice that, if they fail to comply, they'll be subject to civil penalties. These warning letters are also a big warning to industry generally that the FTC means what it said in its recent update to the Endorsement Guides – and that it's planning on enforcement to back it up. These warning letters also even go further than the Endorsement Guides do, warning advertisers and their influencers that they had better be sure that their disclosures not only effectively communicate that the posts are sponsored, but specifically communicate by whom they are sponsored.