As influencer and brand partnerships flourish and shape digital advertising, brands and content creators must ensure that endorsement disclosures are clear, accurate, and compliant with Federal Trade Commission (FTC) guidance. Explore what these regulations require of advertisers and marketers, and how consumer survey evidence may be used in the event of a challenge.
Influencer Marketing Strategy and Advertising Claim Substantiation
Spending on influencer marketing exceeded $4 billion in 2023. Influencers, who are opinion, thought, and taste leaders, can impact not only consumer perception but also a brand’s bottom line. Celebrity endorsements are not new; however, with the rise of social media and the speed of online communication, the reach of influencers has amplified regulatory scrutiny. Brands that fail to adequately disclose paid relationships and other compensation face challenges from competitors or false or deceptive advertising claims under the FTC Act.
The FTC Guides Concerning the Use of Endorsements and Testimonials in Advertising provide disclosure guidelines for influencers and advertisers. The guides include examples of influencer campaigns and show the requirements for what the FTC considers clear and conspicuous disclosure of material connection to a brand. Various brands and celebrities have felt these effects, from the Kardashians to Lana del Rey, and new warnings are being issued.
Recent Guidance from the FTC
At one time, the FTC sent warning letters to two trade organizations, the American Beverage Association and the Canadian Sugar Institute, along with 12 health influencers. The FTC expressed concern about several elements of their marketing practices and “strongly urged” revisions to ensure compliance.
The agency also enclosed a Notice of Penalty Offenses Concerning Deceptive or Unfair Conduct Around Endorsements and Testimonials, which authorizes fines of up to $50,120 per violation, applicable to both the influencer and the sponsoring organization.
Key takeaways for those engaged in influencer marketing include:
- Disclosures must be prominent and accessible. They should not be confined to text or hashtags, since users often skip or overlook written captions.
- Disclosures must be audible or visible. Spoken or on-screen statements in large print should appear within the main content, not buried in accompanying text.
- Platform tools are not sufficient. The “paid partnership” tag on platforms like Instagram or TikTok does not, on its own, satisfy disclosure requirements.
Marketers and influencers should take note of these requirements—or risk significant penalties and reputational damage.
Consumer Surveys and Influencer Marketing Campaigns
When false or deceptive advertising complaints arise from influencer campaigns, consumer survey evidence can be essential. Courts and regulators often look to surveys as evidence of what a “reasonable consumer” would believe about the relationship between an influencer and a brand.
Surveys can be used to measure:
- Whether consumers recognized the sponsorship or payment relationship.
- Whether the disclosure method was effective and conspicuous, and
- Whether the lack of clear disclosure influenced purchasing decisions.
IMS Legal Strategies has decades of experience designing and conducting consumer survey research for claim substantiation, marketing compliance, and litigation support. If you are launching influencer marketing campaigns or facing a regulatory inquiry or litigation, contact IMS Legal Strategies for reliable consumer survey evidence and expert analysis.
