Just How FTC-Compliant Are Today’s Influencers and Brands?

By: The Social Shake-Up

December 12, 2019

As Instagram users become warier of sponsored posts, and following the Federal Trade Commission’s reissuing of a crystal-clear set of guidelines, influencers—and the brands they works with—are running out of excuses when it comes to following FTC regulations. Still, not every influencer is blessed with a legal team, so it’s crucial for marketers to understand the rules and be able to communicate them to content creators in every partnership.

The Social Shake-Up asked Adam Williams, CEO of the branded Instagram content platform Takumi, for his thoughts and advice on FTC compliance for influencer marketing.

Adam Williams, CEO, Takumi

Adam Williams, CEO, Takumi

Which FTC guidelines are most often violated by influencers and brands, and how can brands avoid doing so?

I’ll start with the good news: Following the FTC’s rules is easier than you might think. Marketers and influencers need to keep this common-sense golden rule in mind, which is true of any advertising practice: Influencer marketing should be truthful and not misleading.

That said, there are nuances with specific language used for disclosures, and influencers can mistakenly violate FTC guidelines. (For example, #thankyou, #ambassador or combining the brand name and ad in one hashtag is not enough to properly disclose a partnership). At Takumi, we ensure that all influencer posts’ captions begin with #ad before any other text for absolute clarity. We’ve developed technology that automatically flags when influencers have submitted content that isn’t correctly signposted as sponsored, and these posts are removed automatically.

Another less common but more worrisome issue is intentional violation—brands pressuring influencers to not disclose partnerships in an attempt to make endorsements feel more organic. A recent survey by Takumi found that, shockingly, 62 percent of influencers across surveyed territories have been pressured by brands to contravene the guidelines at least once. Fortunately, 28 percent of this group say this is a rare occasion.

Do influencers and brands fully understand the FTC’s current role and guidelines?

It’s a mixed bag on this one. Only 2 in 5 (45 percent) of U.S. influencers who responded to our survey are confident and completely understand their responsibilities of the FTC guidelines on labelling paid-for influencer content. On the flip side, 2 in 5 (40 percent) of surveyed US influencers say they have a good understanding of the FTC guidelines on labelling paid-for influencer content.

Marketers say they’re mostly clear and cite a greater understanding of guidelines, with 88 percent of surveyed marketers in the U.S. and U.K. stating that guidelines on labelling paid-for influencer content were clear.

Despite those confident in their understanding of the FTC’s role and guidelines, legislation is an evolving process so all players need to continue to pay attention to the changing landscape.

Is regulation-flouting worse among macro- or micro-influencers?

From our experience, it isn’t more common in one group versus another. However, we’ve seen instances where micro-influencers think that because they have relatively smaller followings, they’re more likely to fly under the radar and can, therefore, get away with skirting the rules. It might be tempting to think that the FTC only has the bandwidth to monitor Kardashian-level influencers, but that is simply not the case. The FTC and other consumer watchdogs have taken measures to govern influencers with as little as a few thousand followers, so no one is exempt from the rules.

How can brands better educate themselves, and their influencers, about staying compliant?

Not only should brands be held responsible, but they really need to act as leaders in educating (through briefs and beyond) and ensuring compliance within influencer marketing. Influencer marketing is an extremely powerful tool and offers tremendous value, but we’re on the precipice when it comes to consumer trust and brands need to make sure to future-proof their approach to the practice. Consumers are savvy and aware of how paid partnerships work and expect that brands and influencers are transparent.

Brands are ultimately the buyer in influencer marketing. In most cases, they are experienced marketers and should be up to date on the latest regulations. This approach starts with the attitude of CMOs and filters down to the consumer. To mitigate risks, more brands are turning to influencer marketing platforms to monitor and manage their compliance obligations.

Does the industry need more guidelines? What do you see as the areas that require more regulation and oversight?

As a relatively new medium, the rules and regulations around influencer marketing are still undergoing. While marketers are mostly clear on current guidelines, many called on further clarification, with 46 percent of surveyed marketers responding that the need is there.

There are certain areas that will require further definition: For example, should celebrities be subject to tighter regulation than micro-influencers? Given recent federal investigations around influencer posts for e-cigarettes, should there be restrictions on the types of products influencers can promote? Who is actually qualified to promote such products and how can we ensure they are not promoted among inappropriate audiences?

And then there’s the issue of global vs. local—when brands run global campaigns, which market do you refer to for the regulations? This is a gray area: Influencers have global reach, so brands need to think about where influencers’ audiences are based, as well as the location of the stockist for consumer products.

This said, it is important that influencer activity doesn’t become too formulaic—it all boils down to the golden rule. Part of the magic behind influencer marketing is that when a brand and an influencer’s missions align, they work together to create interesting content.

Learn more about Takumi here.

At The Social Shake-Up