With the growing number of social media users worldwide, it is not a surprise that social media marketing is booming these days.
Influencer Marketing has stood out among all other social media promotional approaches because of its effectiveness and low costs associated. The benefits of Influencer Marketing have made it a fast-evolving industry, expected to reach a worth of $15 billion by 2022.
Even though Influencer Marketing seems like an informal, natural, and authentic advertising form, FTC (Federal Trade Commission) is focused on ensuring its transparency.
Any collaboration between a brand and an influencer must comply with the FTC endorsement guide, as well as with any other type of federal, local or state laws.
Such a partnership between a brand and a content creator can be highly beneficial to both parties, but any failure to comply with legal practices may be followed by lawsuits or fines.
According to FTC, everyone involved in the campaign process is responsible for compliance with the regulations. This includes brands, agencies, and influencers.
In this blog post, we will discuss the most common influencer marketing legal issues.
According to the FTC endorsement guide, a monetary partnership between a brand and an influencer must be obvious for customers. This means that any type of financial, employment, personal, or family relationship must be stated and disclosed.
Take into consideration, that financial relationship also includes receiving products, discounts, experiences or services, or anything else of value.
A disclosure must be easily visible, simple, and clear, described with terms like “advertisement”, “ad”, “sponsored”. Such disclosure is a must for any type of social media content type – including images, stories, videos, blogs, etc.
According to FTC, the company Teami was sued and suspended upon payment of $1 million, due to failure to align an influencer campaign with FTC endorsement guidelines. The content creators did not appropriately disclose their connection to the brand.
Because more than one party are involved in an Influencer Marketing campaign, a conflict about copyrights and intellectual property is possible to arise. A content piece such as a photo posted on social media involves the content creator, the brand and the platform itself.
To avoid any misunderstanding, the parties involved must work on a written agreement or a contract, which specifies any ownership rights. It is significantly important to restrict yourself from using any third-party piece of content without written permission to do so.
A usual Influencer Marketing campaign contains a review of a product or service. FTC insists on a truthful reflection on the product, based on an honest and not misleading review. Influencers are not allowed to state positive opinions on products, services, or experiences, which they have not tried and verified.
Moreover, an influencer might be subject to liability if they promote a product feature, which they have no proof for, for example, scientific or medical proof.
Certainly, Influencer Marketing is an effective advertising approach and can promise great success. However, each campaign must be in line with any legal regulations and policies. Whether you are an influencer, a company, or brand endorsement guidelines are a must, if you do not want to be held responsible for breaking the law.
Influencer Marketing legal Checklist