Ad Disclosure in the Age of Influence:

A Guide for Agencies and Influencers Alike, by Kate Bray

DISCLAIMER
This article is meant to be a helpful guide and does not constitute legal advice. Please read guidelines referenced in full and contact your lawyer if you have any questions.

#Ad. #Partner. #Spon. #Collab.
You can’t scroll through Instagram these days without seeing those familiar hashtags, but, what are they for? Why do they matter? How are they meant to be used?

The internet has provided a platform for regular people to share their genuine recommendations, favourite products, and everyday lives with the masses. As we all know by now, this pattern of sharing and showcasing can lead to some individuals becoming internet superstars of sorts, or, as we call them, Influencers.

The rise of influencers has come from the appealing nature of their relate-ability. After all, these are “normal” people sharing their lives online. They could (and even might be!) your best friends, neighbours, or acquaintances and many of them are making big bucks by sharing their favourite things online. It’s as exciting for advertisers and marketers as it is for influencers. Gone are the days of being confined to magazine ads and TV commercials. Now brands can get their products in front of the masses by partnering with an influencer that they feel can represent them well and influence the purchasing decisions of their following. At least that’s the goal.

When brands and influencers enter into a partnership where there has been a material exchange of goods, services, and/or money, it must be disclosed. The problem is, many influencers and brands are not following through on this very important requirement. And trust — it is a requirement.

Both the Federal Trade Commission (the FTC) in the US and Ad Standards Canada (along with many other similar international agencies around the world) have released guidelines that are meant to instruct influencers and brands on how and when to disclose their relationship. The guides are meant to ensure that influencers are complying with acceptable industry standards, and in the US, with the law (the FTC Act). While admittedly, it doesn’t happen often, if influencers or agencies are found to have violated these regulations, they could be met with a very public warning (at best) or may end up owing a substantial amount in a settlement (at worst).

Why does this matter to agencies and brands?
If your brand or agency enters into a partnership with an influencer and you’re compensating them (not just with money — this includes free goods and services) you’re responsible for ensuring that they disclose their affiliation with your brand. The FTC and Ad Standards Canada are much more likely to issue warnings or pose legal action to large brands and agencies — not individual content creators. At VERB, we recommend building this requirement right into the contract you sign with the content creator. That way, there’s no ambiguity. If the influencer neglects to disclose, they’re in violation of their contract with you and you can remind them that it’s a requirement of the partnership.

What about trust?
Sometimes influencers try to hide the fact that they’re receiving free products or being paid to post about a brand because they believe that their followers will trust them less if they know they’re being paid to do so. And, yeah, that’s kind of the point of all of these rules.

The FTC and Ad Standards Canada recognize that the general public’s perception of an influencer’s endorsement may be weighted as less trustworthy if they’re aware that the influencer stands to gain something from their relationship with the brand. The point of all of this is to ensure that the consumer has all of the facts before being swayed by the opinion of someone they trust.

So, if you’re an influencer, how can you incorporate sponsored posts into your content calendar without losing the trust of your loyal followers?

1. Only enter into partnerships that make sense for you and your brand. Your loyal followers will trust you less if you become a walking billboard. We get it — the money is tempting, but longevity, trustworthiness, and your personal brand are worth more.
2. Promote the products you’ve always loved. Make a point to post on the regular about brands and products that you genuinely love and always have — without being paid. This is how you got started, right? If brands see you posting about how much you love their product, they may wish to enter into a partnership with you. Your followers will remember how you’ve talked about that niche, brand, or product in the past, and the disclosure of your affiliation won’t be a shock.
3. Be okay with saying no. Again, we get it, the money can be tempting. Being noticed by a brand is exciting. But be okay with saying no to a collaboration if it doesn’t excite you or resonate with your audience. In the same vein, if a brand is trying to dictate the tone of your posts or is supplying you with pre-written copy that reads like an ad, try to collaborate with them to see if you can re-write the information in your own voice. That’s why they want to work with you, right? Your followers will be much more engaged with a post that they know has been written by you than a generic ad that’s also appearing on the pages of dozens of other influencers. And, if a brand is dictating too much of you, say no.
4. The most important thing, though, is to remember to ALWAYS disclose sponsorships, free products, and any and all affiliations with brands. Your followers WILL trust you more if they see you as a model of honesty and transparency. Trust that even if you’re trying to hide it, your followers can tell when something isn’t organic, so it’s in your best interest to comply with the regulations for both legal reasons and personal integrity.

Not sure how to do this?
We’ve summarized the most important takeaways from the FTC Guidelines and Ad Standards Canada into one list, but be safe and be sure to read both documents in full. They’re hefty, but you’re worth it ;)

1. Be upfront. Any time you stand to gain something from a relationship with a brand, be clear and transparent about it. Whether you’re sharing an affiliate link from which you’ll earn a commission, a free product, a hotel stay, or cold hard cash, you need to be honest with your followers.
2. Disclosures must be conspicuous. The only hashtags that the FTC and Ad Standards Canada endorse are #ad, #sponsored and #XYZ_Partner and #XYZ_Ambassador (where XYZ is the brand). They ask that these hashtags be present at the beginning of the copy of your blog post, photo caption, or tweet. Readers must not be required to go digging for this hashtag. It has to be clear. These hashtags cannot be hidden within the post.
3. What about #partner, #spon, #sp, or #collab? Nope. Not clear enough, according to the government agencies. These hashtags aren’t widely accepted and do not effectively communicate the nature of the relationship between an influencer and brand. Stick with the hashtags above.
4. Blanket disclosures aren’t enough. A general disclosure on your website or in your bio of your social media profiles isn’t enough. It’s definitely good idea to have a blanket statement present on your channels (something that notifies your followers that you may share sponsored posts and/or use affiliate links from time to time) but this doesn’t absolve you from the responsibility from making explicit disclosures on each and every post that features a material connection with a brand.
5. Disclosures must be specific. You need to tell your followers exactly what product you’re promoting, who the brand is, and what type of compensation you were provided.
6. Don’t use ambiguous language. A disclosure to the effect of “Company X gave me this product to try for free and I love it!” is much more clear than “I love this product! Thanks Company X!” See the difference? In one, the material connection is clear. In the other, it’s ambiguous.
7. If you’d like to know more (and trust us, there are lots of fantastic examples), be sure to read the comprehensive Influencer Marketing Disclosure Guidelines by Ad Standards Canada and the Federal Trade Commission Endorsement Guidelines.

Whether you’re an agency or an influencer, it always pays to be honest. Do the right thing and always disclose. Your followers will thank you for it.

VERB Interactive is a leader in digital marketing, specializing in solutions for the travel and hospitality industry. Find out more at www.verbinteractive.com.