Being a professional content creator and monetizing your social media account(s) is a fun way to make a living. That said, there’s a serious side to it too.
When you’re working with brands and advertising gifted or sponsored products, as a U.S creator you have a responsibility to familiarize yourself with Federal Trade Commission (FTC) guidelines. Failing to comply means failure to comply with the right side of the law—and this can result in you being reported and charged.
If your audience finds out that you haven’t complied with FTC guidelines on a particular platform, they may believe you’re not being authentic and you could lose trust. Losing trust could then lead to reduced engagement and a loss of followers, which could also jeopardize your brand partnerships.
Not sure what you need to disclose and how? Not to worry—here’s our simple breakdown of the legal guidelines social media creators need to follow to appease the FTC, your audience and brands alike.
What are FTC guidelines?
First things first, what’s the FTC? It’s an independent agency of the US government that enforces civil antitrust law and promotes consumer protection.
Influencer marketing falls under the jurisdiction of the FTC, therefore, they created some disclosure guidelines in 2019 for social media creators to follow. Essentially, these guidelines are in place to prevent deceptive ads and ensure that consumers aren’t being misled by undisclosed sponsorships.
After all, bigging up a product or brand is a form of Word-of-Mouth (WoM) marketing that can be extremely influential on a consumer’s purchasing decision. In fact, as much as 79% of consumers claim they trust online reviews just as much as personal recommendations.
When you don’t disclose whether a product has been gifted to you or a brand is sponsoring your post, consumers are unable to tell if this endorsement is genuine.
In 2020, it was reported that the FTC is “cracking down” on undisclosed partnerships. However, it’s brands that have pressured influencers to leave off the “sponsored” or “ad” tags that are being criticized the most.
Even so, there have been instances in the past where influencers have been issued with an FTC Order. If this Order is violated, they are then liable for civil penalties.
In 2017, the FTC supposedly sent warning letters to more than 90 influencers and marketers (rumored to work mostly on Instagram) to ask them to reconsider how they disclose brand ads.
In other words, follow the FTC guidelines and you won’t go far wrong. Keep in mind that if you live outside the US, there may be other local guidelines you need to follow to stay within the law. If a portion of your audience lives in the US, you also need to follow FTC guidelines as well as your local guidelines.
What is an endorsement?
Now let’s address what exactly an endorsement is. In simple terms, to endorse a product or brand is to give it your support or approval, either in the form of a verbal or written statement.
The FTC guidelines clearly state that “tags, likes and pins” are ways you can show you endorse and like a brand or product on social media. They advise against endorsing a product or service you haven’t tried.
When do I need to disclose?
There are two major scenarios when you’re required to disclose to your social media audience about a brand or product you’re posting about.
Note that it doesn’t matter whether you’re a small content creator with 1,000 followers or a big-name influencer with 1 million followers. These rules apply to everyone on social media.
Did you know? 85% of influencer marketers would pay extra to work with insured creators. Learn more
When you have an existing relationship with the brand
If you already have a relationship with the brand you’re posting about, you need to disclose it, whether it’s:
- Employment (you already work for this brand)
- Family (the brand you’re advertising is a family business or a member of your family works there)
- Personal (you have relationships with people who work for this brand)
According to the full FTC guidelines document, these “material connections” may “affect the weight or credibility of the endorsement” given that the connection wouldn’t be “reasonably expected by the audience.” As such, these types of brand endorsements need to be declared to your audience.
Fundamentally, your evaluations of a brand or product must be disclosed even if you don’t think they’re biased and entirely formed from your own opinion.
When you have been given perks
You also need to include a disclosure when there are financial reasons why you’re posting about a brand or product. This includes:
- Receiving money
- Being gifted a product
- Being given a discount
The FTC defines financial incentives as being provided “something of value” to promote a product. If you get any kind of perk from a brand and then mention one of its products without being asked to mention that specific product, you still have to disclose.
How social media creators need to disclose paid sponsorships
It’s no longer enough just to throw a “#sponsored” among your caption hashtags and call it a day. Instead, follow these rules to ensure you’re properly conforming with FTC guidelines.
Firstly, the placement of your disclosure is everything. It needs to be in a position where it’s immediately obvious that the post has been sponsored in some type of way.
If your disclosure can be easily missed, you’re doing it wrong. This can happen if you place it:
- At the end of a post caption or video
- Towards the end of a caption, requiring the user to click to “read more”
- On the last Story or carousel
Avoid mixing it into a group of hashtags or links and make sure it’s positioned within the core endorsement message.
Let us break it down further according to each content type:
- Pictures and short videos, such as Snapchat and Instagram Stories — Superimpose the disclosure over the top so that viewers can see it and read it before the picture disappears
- Videos on YouTube — Disclose in the video itself as well as in the description so that it’s noticeable on both the screen and in the audio (some viewers may be watching with the sound turned off)
- Live stream on Facebook and Instagram — Mention the disclosure in the live stream regularly so that anybody else tuning in at a later time will also be given the disclosure
If there’s a caption opportunity, always place the disclosure at the beginning of your caption for full transparency.
The language you use to disclose a brand or product is just as important as the placement.
According to FTC guidelines, it must be “simple and clear.” For example, quick explanations like “thanks to [brand] for the free product to try” is satisfactory as long as this disclosure is placed in a way that can’t be missed.
Terms you can use include:
Terms you’re advised against using include:
That said, you can use “ambassador” if you combine it with the brand name on platforms that have a character limit, such as Twitter.
You can use a hashtag in front of the disclosure if you wish, like “#ad”, but you don’t have to. Either way, ensure the disclosure is in the same language as the rest of your post.
The full FTC guidelines document outlines that influencers should share their experience of the brand and product honestly and truthfully—based on their own opinion, belief or finding.
It’s common for brands to ask you to include key bits of info that your audience may want to know. However, use your own words wherever possible to stay authentic.
If you receive financial compensation to endorse a particular product and it wasn’t a positive experience, the FTC guidelines advise against claiming it was.
Likewise, the FTC guidelines state that you shouldn’t make something up about a product that the advertiser is unable to prove. For instance, this could be a claim that a certain product can treat a health problem when there’s no scientific proof to back this up.
In fact, any kind of false advertising and disingenuous claims are not allowed.
Tips and other considerations for disclosing
There are a few other things you need to know about influencer disclosures that we haven’t already covered.
- A platform’s disclosure tool may be handy, like Instagram’s brand partnerships label, but the FTC recommends using it alongside your own disclosure.
- Many of your audience members may be close friends and family, but this doesn’t mean that they know about your brand relationships. It’s important to disclose each and every one.
- You don’t need to declare that you haven’t been sponsored if you’re endorsing a brand that you like but don’t have a relationship with.
The takeaway - avoid penalties and build trust with your audience
Even the most established social media influencers get confused about disclosing brand relationships—and this is totally understandable if you weren’t aware of the rules. That said, we hope you’re now clued up and ready to produce posts that are completely transparent.
It’s about abiding by the law to avoid penalties, fines and legal fees. However, it’s also about building and maintaining trust with your audience, strengthening your current brand relationships and acquiring new brand partnerships.
Did you know a creator account gets hacked on average every 10 minutes in the U.S alone?
That's why Notch launched the world's first insurance for Instagram creators against hacks.