The retail industry is rapidly changing with the use of social media, bloggers, style influencers, and affiliate networks. For ease of reference, affiliate marketing is a performance based business model in which the business rewards its affiliates for customers brought by the marketer’s own efforts (e.g. RewardStyle, Rakuten, Pepperjam, ShareASale, to name a few). It makes sense—amidst the hectic schedules of daily life, people are generally no longer spending hours shopping in the mall but rather are turning to the internet for its convenience and ease of use for all shopping needs. Who doesn’t love free shipping + returns and getting what you need delivered to your door with the simple click of a button?
Individuals are also turning to social media to follow celebrities, bloggers, and style influencers for their recommendations on the best products, travel destinations and accommodations, as well as fashion and style picks. Yet another layer of streamlining the online shopping process, reducing time spent in connection with selecting products. If a social media user follows X person’s Instagram account and X person recommends and looks great in a product, the likelihood that Y social media user buys that product is higher. With social media, individuals can easily view images and obtain comments quickly, and will likely factor the same into a decision to purchase a product.
The Federal Trade Commission (FTC), in general terms, monitors and conducts investigations as to claims involving deceptive advertising. Social media, while relatively new (as compared to TV) is regulated by the FTC and monitored for any unfair and deceptive trade practices just like other media outlets. Bloggers are subject to the Federal Trade Commission Act.
What does this mean for the online blogger? While not exhaustive, a few salient points on the guidelines below:
Be Honest and Not Misleading // Provide Clear + Essential Information
When I first started practicing law, I was at an event chatting with a well-known lawyer and Supreme Court Justice at the time. His advice to young and new lawyers, “[t]ell the truth.” Bloggers/influencers should follow the basic truth-in—advertising principle that endorsements should be honest and not misleading. If you have been paid or otherwise given something of value (e.g. money, free garments and/or accessories, free travel accommodations, other perks) to promote a product, disclose this information. Consumers want any information that may impact their purchase of a product and whether an individual has been paid to make a favorable social media post is important or “material” information. Such a relationship likely impacts how much weight a follower may give to an endorsement.
As an example, I entered into a recent partnership with a watch company. They gifted me a watch in exchange for me writing a blog post on the watch, as well as preparing and executing several company approved social media posts. First, I do not endorse any products that I do not personally believe in (I thought the watch was stunning and the craftsmanship impeccable). Second, on my blog post, I expresssly disclosed my partnership with the company, noted that company X gifted me the product, but that the opinions contained within the post were my own. Another way to handle, “the product(s) that I reviewed were given to me by the manufacturers.” In short, provide clear information to potential consumers, specifically any information that may impact their decision to purchase a product.
Disclaimers // Social Media Posts & Personal Blogs
Again, the key is to be honest, not misleading, and disclose essential (or in legal terms, “material”) information—any information that may impact the weight or credibility that consumers give to an endorsement.
Social Media Posts:
– Hashtags: Use the hastag #Ad or #Sponsored (it has been found that the following hashtags are not sufficient to disclose a relationship and/or that the post is sponsored, #Sp, #Spon, #Collaboration, #Collab, #Thankyou, #Partner, to name a few). The hashtag #Ad should not be combined with the company name at the end of a hashtag, such as #CompanyAd.
– Placement of Hashtag: The hashtag #Ad must be placed in a conspicuous spot, e.g. at the very beginning and not in the middle or at the end of a series of hashtags or with links. The recommendation is to place at the beginning of the post.
– Do not go below Instagram’s “more” button: Consumers who read Instagram posts on mobile devices should not be required to click the “more” button so disclosure must be in the first three lines in order to likely be deemed conspicuous.
– Hyperlinks are not likely to be sufficient because consumers may not click on it and may therefore, may miss essential information and needed disclosures.
– Built In Features: Many social media platforms are now including built-in features from a drop down menu that allows a person making an endorsement to note e.g. Instagram’s new feature “in paid partnership with X company.” This alone may not be enough to pass muster with the FTC guidelines. This will be dependent on the visibility in the particular platform and whether adequately conspicuous. Consider using the built-in feature along with explicit disclosure language within the body of the post.
– The term “ambasssador” is likely to be confusing (as on its own the FTC has noted that it is an ambiguous disclosure) as most consumers will not understand the nature of the relationship and therefore, more than hashtag #Ambassador may be needed, as the circumstances dictate.
-Be Mindful of Frequency: Just because you posted one time the hashtag #Ad or made a notation that you were provided a product from the manufacturer to review does not relieve you of disclosure requirements. Notify your audience every time you post in connection with the subject product.
I am currently part of the affiliate networking system so I disclose that on my personal blog, e.g. “I use affiliate links. If you choose to make a purchase from an affiliate link that I post, there may be a small commission paid to me that helps fund the costs of running my website. Linking from this website does not alter the price of the merchandise up or down for the consumer.”
In close, the critical take-away is to provide readers with the needed information so that they can decide how much weight to give your endorsements.
-FTC Truth in Advertising Guide
-FTC Endorsement Guide Concerning the Use of Endorsements and Testimonials in Advertising
-FTC What Peple are Asking Guide (Q&A)
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