New FTC Rules For Endorsing Products Online

by diannejacob
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You know the rules, right? If you live in the US and you are endorsing products online, you must disclose that you received payment or payment in kind.

This rule applies to using social media too. So if you want to write sponsored posts — where you promote a product or service — or get paid to promote products on social media, there are new rules. Let’s go through them.

According to the FTC in its most recent update on endorsing products online:

1. Do you have to disclose? Yes. These rules come from the Federal Trade Commission (FTC) in the US, which protects consumers and promotes competition.

If you don’t live in the US, these rules do not apply. But they are a best practice. Please consider adopting them anyway.

2. What does it mean to endorse? Let’s say you show a photo of a product, or discuss a product or service in a positive way. Those things are enough to warrant disclosure, if a company paid you or paid you in kind.

If no one paid or paid you in kind to promote, then there’s nothing to disclose.

3. There’s a way to disclose. Don’t be coy about stating your arrangment.

Just say a restaurant invited you, a company sent you an appliance for review, or that a brand hired you to write about its butter.

4. Payment doesn’t always mean money. If you got a coupon, a free meal, or a new saucepan, all require disclosure if you are endorsing those products online.

Instagram users, particularly, raise the ire of the FTC. It sent educational letters to 90 social media influencers and brands earlier this year. Twenty one of those got warning letters next because they still did not follow the guidelines. Legal action could follow.

Earlier this month, the FTC released an updated version of endorsement guidelines, titled The FTC’s Endorsement Guides: What People are Asking. It answers frequently asked questions in a conversational way.

Topics covered in the FTC update on endorsing products online include:

  • tags in pictures
  • Instagram and Snapchat disclosures
  • disclosure of free travel
  • whether a disclosure must be at the beginning of a post
  • the adequacy of various disclosures like #ambassador
  • whether a “buy now” button requires a disclosure if it is to an affiliate program.

Why print and TV don’t have to disclose

The issue is “whether the audience understands the reviewer’s relationship to the company whose products are being recommended. If the audience understands the relationship, a disclosure isn’t needed,” says the FTC.

Perhaps this clarification came about because many people complained — incuding on this blog — about why there seems to be a double standard for traditional media. Here’s what the FTC says about that:

“If you’re employed by a newspaper or TV station to give reviews – whether online or offline – your audience probably understands that your job is to provide your personal opinion on behalf of the newspaper or television station.In that situation, it’s clear that you did not buy the product yourself – whether it’s a book or a car or a movie ticket. On a personal blog, a social networking page, or in similar media, the reader might not realize that the reviewer has a relationship with the company whose products are being recommended. Disclosure of that relationship helps readers decide how much weight to give the review.”

So, I hope you’ll read over this FTC update carefully. It is reader friendly and answers several common scenarious. You’ll find that it’s a lot more thorough than previous guidelines. The commission understands the issues better each year, as brands become more sophisticated in how they target influencers. More people are getting into the game, and there are more new ways to promote.

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Thanks to Melissa Hatfield, co-founder of Food Bloggers of Canada, for bringing this update to my attention in the FBC newsletter.

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