How the New FTC Guidelines Affect Creators
If you are a content creator who receives gifted products or payment from working with brands or businesses, you should be familiar with the Federal Trade Commission (FTC). The FTC’s primary role is to protect consumers from discriminatory business practices, such as deceptive, misleading, and/or false advertising, including sponsored posts on social media. Due to the influence of content creators on their audiences, the FTC has updated its disclosure guidelines to ensure all gifted and paid partnerships are clearly stated as such.
Requirements for Disclosing a Sponsored Post
Your partnership must be disclosed in every piece of content you are paid (including gifted products) to create. The following disclosures are examples of what needs to be spoken at the beginning of your content and caption, and via text overlay in your content:
“I partnered with BRAND…”
“BRAND sent me this amazing product…”
“In collaboration with BRAND…”
“BRAND gifted me this product/experience/trip…”
For captions, #ad must be included at the beginning of your post copy where it is clearly visible, cannot be next to other hashtags, and cannot be buried with additional hashtags at the end of your caption.
For Stories, #ad must be visible and placed away from any other hashtags on the Story frame.
For Reels and TikToks featuring text overlay, #ad needs to appear on screen alongside the other text but away from any other hashtags used.
While the number of disclosures may seem excessive, the FTC’s goal is to protect consumers from deceptive advertising. Having disclosures in every piece of a creator’s sponsored content ensures it is not missed under any circumstances. For example:
If someone were viewing a sponsored Reel with the audio off, they would still know the content was an advertisement due to the “#ad” in the caption.
If someone did not read the caption and only listened to the Reel, they would know it was an advertisement due to the verbal disclosure (“I partnered with BRAND…”) at the beginning of the Reel.
If someone were to view the Reel without audio and did not read the caption, the “#ad” text overlay on the Reel would provide disclosure of the sponsored content.
The use of clear language is the most important aspect of the new FTC guidelines. Using shortened words in hashtag form such as #sp, #spon, #gifted, #al, etc. to disclose partnerships is no longer adequate.
When to Disclose a Sponsored Post
Authenticity is a top priority for influencers right now. Having endless sponsored posts on their feed can make followers feel like they’re constantly being sold something, resulting in less connection between the audience and creator. While this can potentially be an issue for creators, it does not permit cutting any corners when it comes to proper disclosures. Disclosures must be made anytime you are paid or gifted products in return for recommending or promoting the product. You must disclose a partnership if one of the following takes place in exchange for a review, recommendation, promotion, etc.:
A brand asks you to endorse their product in exchange for a determined rate.
A brand sends you free product(s) or trip of any amount.
You receive commission from the purchase of a product.
You are using affiliate links.
Money is being donated to an organization or charity in return for a review.
Disclosure Expectations
The FTC’s expectations regarding disclosure are that every consumer engaging with sponsored content is fully aware that they are viewing sponsored content. There should be no question of whether a creator’s content is sponsored or not. There is a difference between promoting a product you love and sponsoring a product.
If you have purchased a product with your own money, enjoy the product, and want to share your genuine review of the product with your audience, no disclosures are required.
If, however, the brand offers free product(s) or payment in return for a review, endorsement, or recommendation, you will need to use all necessary FTC disclosures, even if you have previously talked about the product organically, already own or use the product, etc. As soon as payment or product is given, the content becomes sponsored and needs to be disclosed as such.
Penalties for Failing to Disclose
Improper disclosure of sponsored content is a crime, and creators can be anonymously reported for failing to comply with FTC regulations. Penalties include hefty fines, lawsuits, and flagged accounts.
The new FTC guidelines for disclosure affect every content creator and influencer. Sponsored content is a great way for creators to make money using their creativity and influence, but all sponsored content must be properly disclosed in order to avoid penalties with the FTC. While many creators are worried about spamming their followers with ads and sponsored posts, failing to be transparent about paid partnerships is unethical, inauthentic, and unfair to consumers. For more information, check out Disclosures 101 for Social Media Influencers and FTC's Endorsement Guides: What People Are Asking.
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