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Federal Trade Commission's Plan for Revisiting Influencer Marketing Approach: What does this mean for brands?

Jun 10, 2020

As we highlighted in a former blog post, the FTC released a brochure aimed at providing greater clarity to the Endorsement Guides (“guidelines”) for brands and social media influencers in December of last year. The guidelines, originally enacted in 1980, were last amended in 2009 as part of an agency-wide review of FTC practices. On February 12, 2020, the FTC announced they would be seeking public comment on whether to update the existing guidelines. This effort was characterized by FTC Commissioner Rohit Chopra as a “self critical” analysis of the agency’s current enforcement approach. 

Within the last decade, the evolution of social media accompanied by the increase in influencer marketing has forced the FTC to quickly adapt. Commissioner Chopra said in a statement, “I am concerned that companies paying for undisclosed influencer endorsements and reviews are not held fully accountable for this illegal activity.” Although the FTC has reached several high-paying settlements with popular brands for deceptive advertising, Commissioner Chopra stated, “[I]t is not clear whether our actions are deterring misconduct in the marketplace, due to the limited sanctions we pursued.” 

The FTC is not the only party demanding more accountability and transparency from brands and influencers. English actress and activist, Jameela Jamil, has been outspoken about the negative impact of advertising on eating disorders and body dysmorphia. She regularly highlights influencer partnerships that promote misleading weight-loss products. One brand in particular, Teami, LLC (“Teami”), a company that offers wellness products including detox teas and weight loss supplements, recently reached a $15 million settlement with the FTC. The FTC’s action was prompted after it was discovered that the company made unsubstantiated health claims that their detox tea could cause rapid and substantial weight loss, decrease migraines, and prevent colds and flu. Teami promoted their weight-loss products via a massive social media campaign, by paying celebrities including Cardi B and Jordin Sparks, to endorse their products on Instagram. The action also highlighted that the Instagram posts failed to adequately disclose that Teami had paid the influencers to promote their products. This was a particularly influential settlement, as it highlighted both the responsibility for influencers to be truthful and transparent about their relationships to the brands they promote.

Brands and influencers should draw insights from the FTC’s action against Teami. Here are some things that brands and influencers can do to ensure they are complying with guidelines:

  1. Educate your marketing team and influencer partners on FTC guidelines. It is important to ensure that marketers and influencers are educated about the requirements associated with promoting products to consumers. Brands should consider including a training course on this subject when onboarding new team members, or inviting new influencers to join your marketing campaigns. 
  1. Enter into clearly defined contracts. Brands should ask all influencers to sign a contract that defines clear guidelines and expectations for the partnership. The contract should also incorporate any necessary compliance requirements. 
  1. Establish clear approval processes. Brands should develop clear approval guidelines for all sponsored content. Brands should consider pre-approving sponsored posts to ensure compliance with internal policies. Clear approval processes will allow brands and influencers to safeguard their name value. 
  1. Leverage social media platforms compliance tools when available. The FTC has indicated that it would like to explore the role social media platforms play in influencer marketing campaigns. Brands should continue to leverage their social media and marketing technology platform relationships for help with compliance requirements. 

The increased focus on the influencer marketing industry by the FTC should hopefully bring more clarity to guideline requirements, and serve as a signal to those who may have been slower to adopt the guidelines that the FTC means business! 

Want to learn more? Checkout our newest episode of The Fast Traack where we take a deep dive into this topic.

Nothing in this article is intended to be, nor should it be construed as legal advice or guidance brands from Traackr or Traackr’s legal team.