When it comes to influencer marketing, it is safe to say that the competition is very fierce. There are just far too many companies vying to work with those who have built up an audience, which often means brands are forced to sweeten the deal with gifts and other added perks.
Of course, there’s nothing wrong with this practice. In fact, paying for advertising in cash payments or other items of value has been a part of advertising forever. But, before you jump on the bandwagon, it is important to know that there are actual laws that govern how the process is handled.
It’s true. The Federal Trade Commission (FTC) has issued specific guidelines that state how influencers need to treat these types of relationships and what they need to disclose when receiving payment for their promotions.
As an eCommerce store, this is crucial for you to understand, as failure to do so could leave your company liable. Here is what you need to know before working with influencers and gifting items to grow your retail brand.
What is a Social Media Influencer Disclosure?
Simply put, a social media influencer disclosure is a notice that explains when an individual and a brand have some sort of partnership together that could be deemed a bias when giving an opinion.
To take the concept further, the FTC defines this relationship as one that is business, family, personal, or otherwise similar in nature. That means if an influencer is promoting their best friend’s candle business, they need to explain that they have a personal friendship. Likewise, touting your sister’s apparel company on your Instagram profile would require the same requirements.
From a business perspective, all collaborations that include gifting, financial compensation, commissions, or promotion in exchange for a discount must be disclosed appropriately.
Why Does the FTC Care About Influencers and Brands?
The reason the FTC cares about how influencers and brands disclose partnerships comes down to fair and truthful advertising practices. Simply put, they don’t want the public feeling deceived by an influencer they trust promoting a product in a positive light just because they were paid for it.
The FTC has had rules like this about false advertising for a long time. The new addition to influencer marketing and social media just created a need to expand the guidelines to include this new mass communication format.
How Influencers Should Disclose Partnerships
So, how should influencers disclose these types of partnerships when working with brands? Usually, adding a short description to a particular blog post or the text content in the description of a social media post is sufficient. Even some graphics and images need to be included in the process.
Examples of social media influencer disclosures include:
- Hashtags like #sponsored, #ad, #advertisement, and #commissionablelink.
- A statement disclosing that they were given free items in exchange for an honest opinion.
- A short sentence explaining that they were paid for their opinion.
This usually doesn’t have to be much, but showing a working business relationship between the influencer and the brand is a must.
What About Livestreams and Videos?
According to the FTC, even multimedia content like livestreams and videos should contain a disclosure statement. Furthermore, this needs to be done both in the description and multiple times verbally.
To do this, the influencer would just have to add the sponsored post information to the video description. And then, they would want to mention multiple times that the company is a sponsor of the video.
Creating a Disclosure Policy for Gifting
The good news is that most major influencers already know the drill. In fact, they likely already have a disclosure template that they follow as part of their brand guidelines, which makes it easy to implement when it comes time to post about your gifted product. You can usually even look back through previous partnerships they’ve done and spot their process.
However, you shouldn’t assume this is always the case. Some new influencers might not even know they need to include a disclosure, while others wrongly assume that it is only items over a specific dollar amount.
The best way to handle this as a brand is to have a disclosure policy. Have the influencer sign a document that states they’ll follow all FTC guidelines when adding disclosures in exchange for the gifted item or financial compensation as per your agreement. If they fail to do this and end up fined for their actions, you’ll have the document on file to refer back to in order to remove any liability from your company.
Conclusion: Influencer Marketing & Disclosures
Influencer marketing is an incredibly powerful way to gain attention for your brand, but you have to ensure you’re following all of the rules along the way. By taking the appropriate steps, you can help protect your reputation and brand from liability if the influencer does not do what they’re supposed to in terms of appropriate disclosures.
If you’re ready to skyrocket your influencer marketing campaigns, we’re here to help. Our CAKE social media experts can make it happen. Please get in touch with us today to learn more about our services or schedule a consultation call.
