What the New FTC Endorsement Guides Mean for Marketers
Recently, the Federal Trade Commission released Endorsement Guides, which encourage clearer disclosures on social media posts that endorse a product or brand in exchange for any variety of compensation, whether it be monetary, a contest entry, or otherwise. The aim of these guidelines is to ensure that consumers not involved with the endorsement or brand are fully aware of any pre-existing relationship between brand and endorser.
The need for increased transparency is warranted and the FTC Endorsement Guides have significant implications for brands that have become accustomed to incorporating consumer or influencer endorsements into marketing strategy.
Under the new guidelines, solicited posts about a brand or product should include an accompanying hashtag—one that far more explicitly states a brand’s relationship to the post and its content than was ever encouraged before. In fact, many of the hashtags that have been used for years to designate a solicited post (such as #sweeps) are no longer considered quite clear enough.
Here’s what you need to know so your brand can better comply with these guidelines and navigate the increased regulation in this space.
Use full disclosure
It’s true that the current FTC Endorsement Guides are more suggestion than law. However, the fact that the federal government perceives brand or product endorsements as corresponding to issues of consumer transparency suggests that further regulation in the space may not be too far behind. As such, the best course of action is to operate as if they are legal requirements: ensure that any and all social posts related to a sweepstakes or promotional campaigns are accurately labeled, and solicited endorsements are marked with a full disclosure. A few hashtags that comply with the guides are #sweepstakes (viewed as more clear than the abbreviated #sweeps), #contest, #sponsored and #advertisement. If character limits are of concern, a simple #ad will work, too.
Stay informed
Thanks to the power of online, many brands are able to operate successfully with far fewer resources than ever. Phrases like “blogger,” “online giveaway” and “viral” are second nature, and often, brands can find themselves with a robust online strategy, but without much understanding of the regulations that come with operating in the online space commercially.
While some brands may choose not to comply with the FTC’s guides, keep in mind the government is watching. Brands must stay informed on these issues should additional enforcements be introduced in the future.
Beware of the laws of other lands
When it comes to online activity, more often than not, your audience is hailing from around the globe. This means that the FTC’s guidelines here in the United States may no longer apply when offering, say, an online giveaway to social followers who may happen to reside in Chile, or Cambodia, or Canada. In some countries, the rules for brands are far more lenient, but in others, they are far stricter. To be safe, when offering something online (such as a promotion, sweepstakes, or giveaway) solicit legal counsel to clarify which fans are eligible and to avoid legal issues.
When it comes to the FTC Endorsement Guides, the best course is to err on the safe side. There are significant implications of the FTC’s involvement in issues such as social media marketing and hashtags. It’s likely that additional guides and regulations will be announced over time, and brands will need to abide.
Ira Schlussel is senior vice president, general counsel, HelloWorld. He can be reached at [email protected].
