FTC and Influencer marketing — what to know.
Whether you are a marketer who has dabbled in influencer marketing or an influential online persona who has worked with brands, you need to be aware of the new policies the FTC has enacted to ensure fair advertising protection of consumers and what you should do about it. The problem is real. Media consulting firm Mediakix reported that 93% of the top influencers violate the FTC truth in advertising rules.
President Woodrow Wilson established the FTC in 1914 in part to protect consumers from unfair, deceptive, or fraudulent business practices. Because of the power of influencer marketing as a promotion channel, the FTC has stepped in to ensure that consumers are aware of the commercial relationship between brands and influencers. Let’s begin.
1. Paid or not paid that is the question
In traditional print advertisements, like the first photo displayed above, it is very clear that the person in the photo has a paid relationship with an advertiser. After all this is an advertisement like you would see in a magazine. The brand logo is clearly present. The copy on the image reads “Oh my Lord & Taylor.” And the formatting just looks like an ad. In this case a viewer is certain that the brand paid the model (or her agency) to be in the advertisement.
When it comes to a social media post, like the second photo, any monetary relationship between influencer and brand is not immediately evident. The accompanying caption from user @wendyslookbook only says “{spring awakening} Pairing a cropped trench with @lordandtaylor’s exclusive #DesignLab handkerchief-hem-dress.” Did Lord & Taylor pay this person to write that? Or is this just a fashionista who likes the dress and happened to post a picture in it? It’s more difficult to tell. Why?
Because the advertising industry has made print ads with celebrities and models for decades. Viewers are accustomed to knowing when they see an influential figure alongside a product in a print image, there is a very high likelihood the person was paid to be in that picture.
Social media on the other hand was only developed 10 years ago. It was developed as a way for friends and family to share personal images and updates. And you can be sure that your friends and family didn’t receive money for what they posted. Influencers only began entering your social media channels a few years ago. Therefore the initial reaction to all posts on instagram is that they are personal…even though as we know now this might not be the case. Enter FTC.
2. Make paid content clear
So how do you make it clear, in the eyes of the FTC, that you have done an adequate job of showing a post was sponsored. To start with it must be obvious and above the fold. If an influencer types “sponsored post” at the very end of a string of hashtags and content that is not fair practice according to the FTC. Neither is having a vague allusion to a sponsored post like #sp.
Why is the FTC asking for this? They want viewers to make properly informed decisions. They believe that individuals would consider an endorsement differently if they know whether or not it is paid. This makes sense. Citing their own example, if a hotel had 5 star reviews, but the reviewers were all paid by the hotel to leave good reviews, would this influence your decision to stay there? Probably.
Fortunately Instagram has already launched a “Paid partnership with ______” feature. You can see in the screenshot to the left that this is a post by private user @songofstyle. As of July 26th 2017 she has 7779 posts. Most photos do not have this “Paid partnership with” label. You only see them when you scroll about 20 rows down to three pictures where she is with a Volvo. All three of these photos say “Paid partnership with volvocarusa.”
Instagram discusses in more details the role out of the paid partnership tool. This seems to be a well designed compromise that lets brands sponsor influencers in a transparent way.
3. Increase tracking of posts

Another benefit of Instagram’s new Paid Partnership feature is it allows the user/influencer to tag to sponsor/brand. In doing so the brand is able to gain insight into how the post is performing. This allows the marketer greater insight into engagement and ROI. Kerry Flynn at Mashable wrote a great article on the subject including a video walk through of how to turn on the analytics.
These should both come as excellent surprises to marketers, because in one feature release Instagram made it not only possible for you to track influencer post performance but also to stay compliant with the FTC.
In summary if money or goods are exchanged between a brand and an influencer, make that clear to the audience. So far it seems the audience doesn’t mind that because the expect that influencers get paid by brands. This is how celebrities roll. The new Instagram updates will make both compliance with the FTC and analytics on posts easier for all.
