July 2017

Compliance Corner: the FTC and social media

For most of us, social media has become a key part of our lives. So, it's no wonder that marketers are eager to communicate with consumers via social channels - whether that be through an ad, promotion or influencer content.

But in the quickly-changing world of social, how can brands make sure that today's campaigns remain compliant, even with laws that have been on the books since long before anyone ever updated a status or sent a Tweet?

Our best recommendation is to be as clear and concise as possible, leaving no room for interpretation or misunderstanding on the consumer's end. This helps ensure that brands don't attract the attention of the Federal Trade Commission (FTC), whose job is to protect American consumers from deceiving advertising, especially in the social space.

The FTC is one of the government's biggest regulators, and it isn't afraid to go after brands it thinks are guilty of misleading consumers. As a rule, if a consumer engages with a brand for a chance to win something, or if there is a "material connection" between an endorser and an advertiser (in other words, a connection that might affect the credibility of a consumer's endorsement) it should be conspicuously disclosed.1

We first saw the FTC enforce this in 2014, when it went after Cole Haan for their Wandering Sole Pinterest Promotion. Cole Haan was incentivizing consumers to Pin their products for a chance to win, but was not requiring them to clearly state that those Pins were connected to a promotion.

This incident led to the birth of hashtags for social media disclosures - #Promotion, #Ad, #Sweepstakes, etc. These hashtags clearly identify to other consumers when a post is associated with a marketing campaign.

But what happens if your brand posts something without the proper disclosure? Well Dunkin' Donuts, Puma, Chanel and Adidas can tell you first hand that the folks at the FTC are watching and, when you least expect it, they will nab you.

As recently as March 2017, those brands were among several that received letters from the FTC in response to influencer posts that lacked proper disclosures. In these cases, the Commission said that simply having an influencer use #ThankYou or #Partner was too subtle, reinforcing that clear disclosures are a legal requirement.

The bottom line: when in doubt, just remember to be clear, concise and use the correct disclosure. The more overt your message, the better chance you'll have of reaching your customers and not running into trouble with the FTC.


Sources Cited:

1. "FTC Staff Reminds Influencers and Brand to Clearly Disclose Relationship," https://www.ftc.gov/news-events/press-releases/2017/04/ftc-staff-reminds-influencers-brands-clearly-disclose

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By Melissa Mallinson
Account Manager, Legal Compliance

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