FTC Focuses on Social Media for Truth in Advertising

Michael S. Byrd | 9.18.17

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The Federal Trade Commission (FTC) has directed its focus to social media influencers. The FTC’s actions highlight a concern as to whether influencers understand that truth-in-advertising standards require disclosures for any endorsements. In fact marketing companies who use paid influencers as well as celebrities and athletes recently received letters from the FTC to raise awareness and rectify a growing problem with compliance. The FTC requires disclosure when there is a material connection between and endorser and the company promoting a product. Material connections may mean payment, a business relationship, a family relationship, or even receiving free products for promoting the product. FTC even offers the following advice for making effective disclosures on Instagram:

  • Keep disclosures unambiguous. The FTC wants the disclosure to explain the nature of the relationship between the influencer and the brand. The FTC notes that words subject to multiple interpretations or unfamiliar abbreviation likely will not work. It recommends a more common sense approach by requesting that the context of the post be considered to assess whether the connection is clear.
  • Make the disclosure hard to miss. The FTC further notes that the influencers and marketers look at the disclosure from the perspective of how the consumers will view the post. The FTC specifically references Instagram and the need for the disclosure to appear before the “more” button where the Instagram user can click to view more information regarding the post.
  • Avoid disclosure in hashtags. The FTC particularly highlights that it is not appropriate to include the disclosure in a string of hashtags.

 

For more detailed information regarding the FTC’s recent announcements, please view the FTC’s endorsement guides. Additionally, the following is a sample of the letter recently sent by the FTC.

 

As our business clients increase promotion via social media and our healthcare clients attempt to create a presence and reach patient populations by social media, it is imperative to understand these disclosure rules. For example, it is common for plastic surgeons, medical spas, and non-healthcare businesses to use influential customers or to incentivize influential customers to promote the services of our clients. These recent statements by the FTC create risk to this approach, unless appropriate disclosures are made.

 

Alex Thiersch, CEO of the American Medical Spa Associate and Managing Partner for ByrdAdatto’s Chicago office, noted “Our medical spa members and clients are not aware of the compliance considerations with use of social media to promote their medical spas. Not only is there a lack of awareness regarding FTC regulations for disclosure based on this most recent guidance by the FTC, there is a lack of awareness that most medical spas are subject to its state medical board rules regarding advertising.”

 

For more information regarding the use of social media in your business, please contact Michael Byrd at mbyrd@byrdadatto.com or 214-291-3202, or Alex Thiersch at athiersch@byrdadatto.com or 773-831-4702.

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