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May 30th, 2017
FTC “Influencer” Letters Shed More Light on “Clear and Conspicuous”
The FTC staff recently sent out more than 90 letters reminding influencers and marketers that influencers should clearly and conspicuously disclose their relationship to brands when promoting or endorsing products through social media. (We first wrote about it here.)
In those letters, the FTC reiterated that "material connection[s]" between an endorser and the marketer of a product — in other words, connections that might affect the weight or credibility that consumers give the endorsement — should be clearly and conspicuously disclosed, unless the connections are already clear from the context of the communication. Material connections may include business or family relationships, payments, or giving free products to the endorser.
The FTC also emphasized that a material connection disclosure must use unambiguous language and must stand out so that consumers can notice it easily without looking for it. Specifically, the FTC made three recommendations:
- When making endorsements on Instagram, influencers should disclose any material connection above the "more" button.
- Influencers should either put the material connection disclosure at the beginning of the post, or avoid multiple tags, hashtags or links if the material connection disclosure is placed at the end of the post.
- Influencers should use #ad, #sponsored or craft an alternative disclosure that makes the material connection sufficiently clear.
When we first wrote about this development, the individual letters were not public. But we have now obtained and reviewed the individual letters. They reveal important additional information about what constitutes "clear and conspicuous disclosure" of a material connection between an endorser and the marketer of a product. Here's what you need to know.
First, if the "disclosure" is language that any satisfied consumer might include in his or her social media post, then it is not sufficient to disclose the material connection between the brand and the endorser. Merely tagging the brand, or stating "Thanks @Brand" is not sufficient. For example:
- In its letter to the marketer of AQUAhydrate regarding the Instagram post by Sean Combs "Let's GO!!! @aquahydrate #balance #hydrate #tryIT," the FTC noted that "[w]e understand that Mr. Combs is an owner and director of AQUAhydrate. Mr. Combs's material connection to your company should be clearly and conspicuously disclosed in his endorsements." (March 20, 2017 Letters to Sean Combs and Hal Kravitz, CEO of AQUAhydrate, Inc.)
- Regarding a post by Shay Mitchell about the Bioré Baking Soda Scrub product, the FTC explained that "#TBT BioreAmbassador," at the end of a post, after a long line of emojis, is not a sufficient disclosure of the business relationship between Mitchell and the marketer of Bioré. (March 20, 2017 Letters to Shay Mitchell and John Nosek President of Kao USA, Inc.)
- Regarding posts by influencers about Buscemi sneakers, the FTC noted that "a statement like 'Thnx @Buscemi' or 'Thanks @Buscemi' is probably inadequate to inform consumers of a material connection because it does not sufficiently explain the nature of the endorser's relationship to your company; customers could understand it simply to mean that the person is a satisfied customer." (March 20, 2017 Letters to Ciara Princess Williams and Dorothy Wang, Mr. Jeremy Joseph, President & General Counsel, Buscemi, LLC.)
The FTC also sent letters to influencers and marketers who tried other types of disclosures (rather than using #ad or #sponsored). The FTC flagged these disclosures for lack of clarity. For example:
- Regarding posts that included @fabfitfun, #fabfitfun and #fffpartner, the FTC stated: "we don't know if consumers will understand "#fffpartner"; it would be clearer if you used 'FabFitFunPartner' or 'FabFitPartner' instead." (March 20, 2017 Letter to Messrs. Daniel and Michael Broukhim, Co-CEOs and Co-Founders, FabFitFun, Inc.)
- Regarding a post about HelloFresh, the FTC explained that "[m]any consumers will not understand "#sp" to mean that the post is sponsored." (March 20, 2017 Letters to Ms. Caroline Manzo and Mr. Dominik Richter CEO, HelloFresh AG.)
- Regarding Victoria Beckham's post "loving this new contour Decollete by my friend @drlancerrx," the FTC found the disclosure inadequate, stating "[w]hile Ms. Beckham's Instagram post refers to Dr. Lancer as a friend, it does not indicate whether she has a financial or other business relationship with Lancer Skincare." (March 20, 2017 Letters to Ms. Victoria Beckham and Ms. Tracey Sameyah, CEO, Harold Lancer, MD Lancer Skincare, LLC.)
What can you do if you don't want to use #ad or #sponsored? Make sure the disclosure isn't just an expression of gratitude for the brand, or an expression of how much the influencer cares about the brand, or an expression of how familiar the influencer is with the brand. The disclosure must unambiguously explain that the influencer has a connection to the brand beyond just liking or using it. Perhaps the relationship is a business partnership, or the influencer has been paid or received swag or other gifts to make the post. Whatever it is, the FTC won't tolerate anything less than clear and conspicuous.
If you have any questions about endorsements and testimonials, or about any other advertising law issues, please contact Terri Seligman at (212) 826 5580 or firstname.lastname@example.org, Jeff Greenbaum at (212) 826 5525 or email@example.com, Jess Smith at (212) 705 4876 or firstname.lastname@example.org, or any other member of the Frankfurt Kurnit Advertising, Marketing & Public Relations Group
Other Advertising Law Alerts
What the Advertising Industry Can Learn from Kim Kardashian’s Settlement with the SEC
On October 3, 2022, the Securities and Exchange Commission (SEC) announced that it entered into a $1.26 million settlement with Kim Kardashian over her social media promotion of the EMAX token without disclosing payment she received from token issuer, EthereumMax. The matter provides important lessons for advertisers. Read more.
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Get Ready for California’s New “Automatic Renewal” Rules
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June 22 2018
“Made in the U.S.A.” Claims Continue to be Scrutinized
In 2016, California amended Section 17533.7 of the California Business and Professions Code ("Section 17533"), liberalizing the standard for selling products labeled "Made in U.S.A" to California consumers. Read more.
June 4 2018