FTC

The Federal Trade Commission is seeking public input on an array of issues connected to influencer marketing as part of a review of its endorsement guides, MediaPost reports.

The guides establish recommendations for online testimonials and influencer marketing.

The FTC wants feedback on things like how well advertisers and endorsers disclose the existence of payment for social media promotional posts; whether kids can understand those disclosures; and if guides should address the use of affiliate links by endorsers.

“The FTC’s request for public comment suggests it is planning on doing a wide-ranging review of the endorsement guides,” Jeff Greenbaum, an advertising attorney with Frankfurt Kurnit Klein & Selz, tells MediaPost. “People should expect to see substantial revisions come out of it.”

According to a statement from the FTC’s Rohit Chopra, which was reported by TechCrunch, undisclosed influencer marketing social media posts should result in financial penalties.

“When companies launder advertising by paying an influencer to pretend that their endorsement or review is untainted by a financial relationship, this is illegal payola,” Chopra writes. “The FTC will need to determine whether to create new requirements for social media platforms and advertisers and whether to activate civil penalty liability.”

It has been 11 years since the FTC last did a major overhaul of the endorsement guides. That was before the founding of Instagram, one of the biggest influencer marketing platforms.

Back then, the agency said — in non-binding guidance — there needed to be disclosure of material connections between online endorsers and advertisers. MediaPost’s report says subsequent FTC recommendations clearly indicate that it takes a broad view of relationships that should necessitate disclaimers.

“For years,” The Verge reports, “the Federal Trade Commission has required influencers to disclose sponsored posts, but the guidelines seem to have had little effect. In one recent case… a Lord & Taylor campaign paid 50 social media influencers to post about a dress on Instagram, but didn’t require them to disclose that the posts were sponsored. The FTC charged Lord & Taylor with deceiving the public, settling the case by prohibiting the company from ‘misrepresenting that paid ads are from an independent source,’ but didn’t levy a monetary fine.”

Last year Sen. Richard Blumenthal (D-Connecticut) urged the FTC to probe influencer-marketed products like “detox tea” (containing an over-the-counter laxative with potentially damaging side effects) to children and young adults.

“Unfortunately, many manufacturers of these products are taking advantage of young people’s insecurities and the power of celebrities on social media platforms to endorse their products,” Blumenthal said in a letter to the agency.

The FTC will accept comments for 60 days after its official notice of review is published in the Federal Register.