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Winning at Social Media Marketing Without Pissing Off The FTC

By Rion Martin  •  June 15, 2015

  

Winning at Social Media Marketing Without Pissing Off The FTC

Posted by: Rion Martin on June 15, 2015
Rion Martin
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Paying Drake to provide a shoutout for your new product? You better make sure his tweet includes the hashtag #Ad. Looking to increase your brand’s perceived popularity by purchasing likes? You might be required to disclose how many of your likes you’ve paid for.

These potential requirements come after a update to, The FTC’s Endorsement Guides: What People Are Asking, which has major implications for influencer and social media marketing.

With the FTC serving Cole Haan a notice last year for a Pinterest contest that they felt violated a section of the Federal Trade Commission Act, it is clear that these latest updates are setting the stage for the FTC to begin taking action.

Here’s what you need to know.


Being limited by 140 characters is no excuse for non-disclosure

tweet box with lack of space to note that it is an ad

While the FTC isn’t mandating the specific wording or phrasing of disclosures, they have made it incredibly clear that lack of space or characters is an unacceptable excuse for failing to clearly attribute a sponsored statement.

When it comes to disclosing a paid relationship on Twitter, the FTC highlighted that it does not take many characters to adequately disclose a paid endorsement. This is what they had to say:

The words “Sponsored” and “Promotion” use only 9 characters. “Paid ad” only uses 7 characters. Starting a tweet with “Ad:” or “#ad” – which takes only 3 characters.

Source


Trading contest / sweepstake entries for endorsements requires disclosure

Wandering sole contest with corrected hashtag

This is where Cole Haan got into trouble. The brand setup a contest that required entrants to create Pinterest boards showcasing Cole Haan products and include “#WanderingSole” in the description.

The FTC believed that, “… participants’ pins featuring Cole Haan products were endorsements of the Cole Haan products, and the fact that the pins were incentivized by the opportunity to win a $1000 shopping spree would not reasonably be expected by consumers who saw the pins.”

However, it is clear from the recent FTC guidelines that, had Cole Haan simply, “[made] the word “contest” or “sweepstakes” part of the hashtag,” it would have provided the information necessary to alert third-parties that the Pinterest boards they were viewing were incentivized endorsements.

In essence, #WanderingSole is unacceptable, but #WanderingSoleContest is acceptable.


Paid endorsers can “like” a post without disclosure (for now)

Being paid to like a Facebook page or post is A OK

This is an area where the FTC is seems unsure of how to proceed.

Many platforms provide no way for a user to disclose actions such as “liking” or “pinning” as being within the scope of a paid endorsement. Because of this, these types of actions appear to fall outside the scope of FTC scrutiny.

That being said, the FTC discourages advertisers from using features like these that do not allow for clear disclosure of a paid relationship.


Purchasing fake likes and followers is considered deceptive advertising

Banner ad for buying Twitter followers

Although offering incentives that lead to follows and likes is currently within acceptable bounds, buying likes and/or followers from non-existent people or people who have never used the product/service is not acceptable.

The FTC sees the practice of buying likes as a clearly deceptive practice that provides false information to consumers about the reputation, quality, and/or popularity of the company. The FTC goes on to say that:

“…both the purchaser and the seller of the fake “likes” could face enforcement action.”


Images alone, even if not intended to be promotional, can be considered endorsements

Image of GoPro camera with background boca

This guideline raised eyebrows and received a bit of contention around the office for being perceived as going too far. However, the FTC has now laid out clear guidelines for how images that might not be intended to be promotional may still require disclosure of a paid relationship.

Simply posting a picture of a product in social media, such as on Pinterest, or a video of you using it could convey that you like and approve of the product. If it does, it’s an endorsement.

Source

Translation: If you’re being paid to endorse a product and you post an image, or a video, that could in any way be perceived as your approval of said product (or company), then it must be disclosed.


Unless it’s Michael Jordan for Nike, celebrity endorsements should be fully disclosed

Eva Longoria Twitter Ad for Wells FargoSource: Twitter

Here the FTC is rather vague and leaves a lot of room for interpretation. In the case of a whether a famous athlete or celebrity has to disclose his relationship as an endorser to a brand everytime he mentions them in a tweet:

It depends on whether his followers understand that he’s being paid to endorse that product. If they know he’s a paid endorser, no disclosure is needed.

Source

Yet, the FTC goes on to say that it is tricky to establish whether followers fully understand if a celebrity or athlete is a paid endorser.

Furthermore, “Under the law, an act or practice is deceptive if it misleads “a significant minority” of consumers.” Meaning, that even if the majority understand the relationship, it must still be disclosed for the minority that might not make the connection. Source

What this really means for brands is that if there is any possible shred of doubt, the relationship should be disclosed.


Bloggers must disclose if they received anything of value when mentioning a product

This blog post was brought to you by moneyImage by: Freepik

Many bloggers have done a great job at disclosing material relationships between themselves and the makers of the products they discuss.

However, for those with less stellar track records, the FTC has now made it crystal clear that whether a blogger receives something of value or any sort of perk at all in exchange for mentioning a product, that relationship must be obviously documented in their post.

Although the relationship must be noted, it can be mentioned with a disclosure as simple as:

“Company X gave me this product to try . . . .”

Source


When it comes to video, disclosures cannot be placed only in the description and must be made at the beginning, not the end

Chrome ad overlay on YouTube video

With all disclosures, the relationship between an endorser and a company must be explicitly stated in clear, easy to understand language within the content of the endorsement. For video based content this means incorporating the disclosure into the video itself.

Even then, there several methods the FTC deems unacceptable means of providing disclosure:

  1. Including the information in the description of a video, as is often done for YouTube videos, is not an acceptable means of disclosure.
  2. Including a disclosure at just the end of the video is also not adequate as many viewers may not watch the entire video.
  3. Placing the disclosure in a location on the video that may be obscured by advertisements is also inadequate for establishing the relationship.

If reviewers were incentivized in any way, it must be clearly stated in the review

Amazon style review of fake product SpinMop Spin!

Having read through a competitor’s contract and found a jaw droppingly unethical clause that granted, “a discounted rate for contributions to marketing activities, including reviews and testimonials,” the FTC’s stance on sponsored reviews put a big grin on my face.

Essentially, regardless of if a review turns out to be positive or negative, if you pay a reviewer, give them an item for free, or provide a product for an extended length of time, this must be clearly mentioned in the review and any reference to it.

One particularly astute observation in this guideline noted that:

“[Even assuming the reviewers are unbiased], it’s also possible that the reviewers may wonder whether your company would stop sending them products if they wrote several negative reviews.”

Source

The logic here is that even if a company requests unbiased feedback, there may be underlying incentives not to leave negative remarks for fear that a reviewer’s future eligibility may be revoked.


What this all means for influencer and social media marketing

When in doubt, call out paid endorsements

Disclosure. Disclosure. Disclosure. Above all, the latest FTC guidelines seek to define what deceptive advertising means when it comes to digital media and what must be disclosed in order to avoid running afoul of the agency. Which happens to be nearly everything.

Fundamentally, the rule seems to be, if there could be any question regarding whether the majority or minority of those that come in contact with the content fully understand that a relationship of mutual benefit exists between endorser and the product, then it must be disclosed.

For Brands

It is ultimately the responsibility of the company to monitor for compliance and ensure guidelines are being followed. As the FTC outlines, “delegating part of your promotional program to an outside entity doesn’t relieve you of responsibility under the FTC Act.”

For Agencies

For agencies that recruit influencers to endorse their clients, these new guidelines can be both a threat and an opportunity. They are a threat to an agency’s reputation if representatives fail to have influencers adequately disclose that they are being compensated for their endorsement.

However, for those agencies that can develop a reputation for stringent compliance and transparent reporting, there may be more opportunity to manage pieces of endorsement-based campaigns that brands might otherwise try to handle in-house.

Conclusion

Although many may find the FTC’s guidelines harsh, at the end of the day they bring much needed transparency to what is expected from digital marketers in order to achieve the noble goal of protecting consumers from deceptive practices.


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