Auhored by Lindsay Gehman
Influencer marketing saw explosive growth in 2016, with 86% of marketers having used the tactic, 94% of whom found it effective. In 2016, most marketers spent between $25,000 to $50,000 per influencer marketing program, which amounts are expected to double in 2017, with overall budgets increasing as well. Influencer marketing is a type of marketing that focuses on using key subject matter experts (or influencers) to drive a brand’s message to the larger market in a more personalized, authentic way. An influencer is anyone who has a sizable network of people who follow and engage with them, usually over social media channels such as Facebook, Twitter, Instagram, Snapchat or YouTube.
While the reach and impact of influencer marketing is without question, the Federal Trade Commission (FTC) and other governmental and industry organizations are closely scrutinizing influencer marketing campaigns for indications of deceptive marketing practices, which could have financial and reputational repercussions for advertisers and agencies alike. The FTC publishes Guides Concerning the Use of Endorsements and Testimonials in Advertising (Guides), which are designed to reflect the principle that endorsements must be honest and not misleading. Generally speaking, the Guides provide that (i) an endorsement must reflect the honest opinion of the influencer and (ii) if a connection exists between an influencer and an advertiser that consumers would not expect and such connection would affect how consumers evaluate the endorsement, that connection should be disclosed.
Odds are, if you’re an advertiser or agency, you’ve probably already incorporated influencer marketing as part of the your overall marketing strategy or offering. If not, you probably should. Either way, understanding FTC guidelines and recent decisions and adopting appropriate policies and best practices are crucial. A best practices checklist for how disclosures should be made, and what advertisers and advertising agencies can do to ensure compliance, are set forth below.
Advertisers and agencies must ensure that influencer disclosures are “clear and conspicuous.” Below is a best practices checklist for disclosures:
The FTC holds advertisers responsible for ensuring that influencers comply with the FTC’s guidelines. While the FTC has not yet held agencies or influencers themselves directly responsible for compliance, agencies and influencers may be held contractually liable through indemnification or other provisions vis-à-vis the advertiser. As such, advertisers and agencies are highly encouraged to take appropriate steps to ensure that the influencers engaged by them or on their behalf are in compliance. Below is a best practices checklist for what advertisers and agencies should do with respect to the influencers they engage: