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As we enter a new year, the influencer marketing landscape is witnessing notable changes impacting both brands and talent with recent updates to the Federal Trade Commission’s (FTC) guides on endorsements and endorsements in advertising . Dive deeper into the key insights shared in this informative episode of the IP Law Blog Podcast Briefing.
Understand the role of the FTC
The FTC has the authority to investigate and bring lawsuits related to recommendations made on behalf of advertisers under Section 5 of the FTC Act, which generally prohibits deceptive advertising. The Endorsement Guide provides insight into how the FTC recognizes various marketing activities that involve endorsements and how the FTC Act’s deceptive advertising prohibitions apply to those activities. is intended to provide. The guide has no legal force. Still, they are considered to reflect safe practices. This means that if your marketing efforts are inconsistent with the Guide, you may be subject to enforcement action for false advertising, including fines and damages.
The guide has been around since 1979 and received its biggest update in 2009 to accommodate bloggers, celebrity endorsers, and user-generated content. Since then, the guide has continued to be updated to keep pace with the evolution of social media advertising.
Changes – Approvals, approvers, and the important relationship between advertisers and approvers
The FTC has provided some new guidance on what an authorization is and who is an authorizer. The historical definition of endorsement is an advertising, marketing, or promotional message for a product that consumers are likely to believe reflects the opinions, beliefs, findings, or experiences of a party other than the sponsored advertiser. The FTC currently includes “tags in social media posts” in its list of things that “may” be recommendations.
There have also been changes to who the FTC considers approvers. The FTC currently defines an endorser as someone who appears.[s] Be an individual, group, or organization. This is due to the proliferation of AI influencers. The FTC noted that this expanded definition does not apply only to virtual or fabricated influencers. This also applies to fake review authors and non-existent organizations claiming to be endorsements.
The FTC also made several changes to the section of the guide that addresses disclosure of material relationships between endorsers and advertisers or sellers of products. This connection leads to the inclusion of “#Ad” and similar tags. It is always clear that financial relationships are material relationships that must be disclosed. The revised guide states that material connections include “business, family, or personal relationships,” regardless of whether the advertiser is requesting an endorsement; now includes situations where recommenders are offered free or discounted products (including products unrelated to the endorsed product). In return. Significant connections may also include other perks, such as early access to products, receiving prizes, and television appearances. Disclosure of material relationships must be clear and conspicuous. This means that disclosures must be difficult to miss and must be easily understandable to consumers.
Responsibility and its traps
Previously, wording in the Guide to Advertiser Responsibility stated: “Where there is a relationship between an advertiser and an endorser, the advertiser is liable for misleading or unsubstantiated statements made through the endorsement. ” was written. The FTC removed the phrase “if there is a connection between the advertiser and the endorser.” Generally, there is a connection between advertisers and endorsers, as the content in question is often a marketing or promotional message. However, the FTC noted that a connection is not necessarily required for an advertiser to be responsible for advertising. For example, if an advertiser retweets a positive statement by an unaffiliated third party or republishes a positive review by an unaffiliated third party in an ad, that statement or review may be Even though there is no such recommendation, the advertiser may be subject to liability. That kind of connection.
The guide also addresses new types of people who may be liable for false or misleading advertising. This new section addresses the responsibilities of intermediaries such as advertising agencies, PR firms, review brokers, and other similar intermediaries. The focus of this new section is to hold accountable parties involved in creating deceptive advertising. Potential liability is tied to having knowledge of the accuracy of the statements within the authorization and your role in its creation or use. A purely passive participant with no actual knowledge of the deceptive or false nature of the advertisement is likely to escape liability.
Performance claims
Performance claims must include clear and conspicuous disclosures, and the “results may vary” standard no longer holds true. If the claimed performance is not a typical result, the advertiser must clearly and conspicuously disclose the performance that is generally expected in the circumstances depicted. To be effective, the final impression of the ad must change so that the disclosure is not misleading.
As the influencer marketing landscape continues to evolve, staying informed about FTC guidelines is important for all involved. The latest changes reflect the FTC’s efforts to address the growing realm of sponsored content on social media. Following these guidelines will ensure a transparent and compliant influencer marketing environment in the new year.
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