Given the amount of money nowadays changing hands in the influencer industry, it was only a matter of time before regulators took it more seriously and tried to tighten the screws on the way this business is done.
At the heart of an influencer's ability to monetize, of course, is endorsement-based advertising and product placement, done in exchange for money paid by brands. However, making appropriate disclosures that will ensure consumers are not misled doesn't seem to be their strong suit.
The US Federal Trade Commission has kept an eye on the scene, going after some of the more egregious cases of deceptive marketing in the past, mostly taking place on YouTube.
Prompted by one such case – when owners of the CSGO Lotto gambling site talked it up on YouTube without letting their audience know they also owned it – the FTC started sending guidance letters, described by PC Gamer as “dense and dull,” warning influencers that they must disclose any ties with the products they are endorsing.
Now, the FTC has decided to make sure its message is also clear and easy to understand, detailing all the times when “an influencer's relationship with a brand would make disclosures necessary.”
The guide explains how to make a disclosure in photos, videos, and live-streams, and points out that influencers must clearly state when they have “personal, family, employment or a financial relationship” with brands that pay them to shill their products online or compensate them in another way.
Influencers are also told not to lie: endorsing a product that they never tried, or claiming that it's good when they actually found it to be “terrible,” as well as claiming health benefits with no proof – these are all behaviors frowned upon by the FTC.
And disclosures themselves should be kept free of confusing language such as using “spon” instead of “sponsorship” or “collab” instead of “collaboration.”
The article praises the content and tone of the regulator's document, “Disclosures 101 for Social Media Influencers,” for its simple language accompanied with pictures and a video. The format is used in the hope of speaking to the influencer demographics, i.e., young people, who, as things stand, are often either unaware or uninterested in the fact they might be breaking advertising rules as they earn a living online.