New FTC Guidelines Could Prompt Marketers, Influencers to Revisit Endorsement Practices

livemint.com:

The Federal Trade Commission has issued a long-anticipated update to its guidelines for endorsements, which advise businesses about how to make sure consumers understand when celebrities, influencers or even regular consumers are compensated to promote or review their products. Some marketers and influencers will now need to go beyond using hashtags such as “#ad" in social media, for example, to ensure that all users will see that a post is sponsored without having to click “more" or read the full text of the post, the FTC said last week as it released the update.

The FTC has long accepted many of marketers’ standard disclosure methods as sufficient, but the new guidelines make clear that this is no longer the case by going into greater detail about what they must do to avoid potential penalties, said Jeffrey Greenbaum, a partner in the advertising, marketing and public relations practice of law firm Frankfurt Kurnit Klein & Selz. Allison Fitzpatrick, a partner at law firm Davis+Gilbert who specializes in social media and influencer marketing, said, “I think the whole influencer endorser landscape or environment [and] every party involved in it is on notice now." The guidelines also address several issues that have arisen since the last update in 2009, such as the introduction of artificial-intelligence-powered virtual personalities.

The FTC has been relatively quiet on influencer marketing in recent years, but the new guidelines likely foreshadowmore high-profile cases like those filed against retailer Lord & Taylor and tea brand Teami, experts said. Lord & Taylor settled with the FTC in 2016 after allegedly failing to disclose that it had paid for a magazine article and a series of posts by fashion influencers that