The Federal Trade Commission (FTC), an organization that monitors and regulates anticompetitive, deceptive or unfair business practices in the United States, has updated its FAQ page for the first time since 2010 to include updated guidelines around social media endorsements, online reviews and contests.
By doing so, it put new laws in place that social media experts expect the regulatory body to enforce actively in the coming months. The FTC did not publicize the change very much, so most marters are actually unaware of such guidelines. But not knowing will not keep you safe from legal actions. The organization has already fired its first warning shot by warning Cole Haan of potentially deceptive behavior with its sponsored Pinterest contest at the end of 2014. No legal action was taken, since the there were no official guidelines published - yet.
However, this has changed now. Allison Fitzpatrick, an attorney for the advertising, marketing and promotions practice group at Manhattan-based law firm Davis & Gilbert, said in an interview with Marketing Land:
“Now they are saying, ‘We have given guidance. You are all on notice. So you are not going to get a warning letter. You are going to get an action.”
We summarized the main points for you below, but make sure you do your due diligence and know the facts! I am not a laywer, this is not legal advice.
Contests & Sweepstakes Rules Must Be In Compliance
As a social marketer, one might assume that people participating in the contest are aware that by sharing or tweeting about the product, the company or the contest, they are publically endorsing you. However, the FTC disagrees and errs on the side of caution — and so should you! You must include the word 'contest' or 'sweepstakes' in the hashtag (#sweeps is "probably not enough") or post to make it clear that this message is an entry — not an unsolicited endorsement.
But what if a social media post gives the participant a $1 OFF coupon or some cheap swag? Does that need to be disclosed? The FTC does not answer this definitely and puts it on you. You should judge "whether knowing about that gift or incentive would affect the weight or credibility your readers give to your recommendation. If it could, then it should be disclosed."
Celebrities & Influencers Must Disclose Vendor Relationships
If you are using celebrity or industry influencers in your social media marketing, you need to buckle down to ensure that everyone is aware (and follows) the strict guidelines regarding sponsored endorsements. And the FTC does not only restrict this on positive reviews.
Even posting a picture, pinning an image on your Pinterest wall or posting a video showing you using the product can be seen as you liking or advertising the product! If your audience believes you are endorsing a product, and you have a relationship with the company, you must disclose that relationship.
However, the FTC admits that "determining whether followers are aware of a relationship could be tricky in many cases, so we recommend disclosure."
Facebook "Likes" Are Tricky, But Buying Fake Likes Is Definetly Not Okay
Disclosing whenever you are not sure and being more cautious about posting is one thing, but Facebook "Likes" is an entirely different animal. You cannot disclose that you liked a page or a post and you are paid/incentivized for it. The FTC acknowledges that: "Advertisers shouldn’t encourage endorsements using features that don’t allow for clear and conspicuous disclosures."
However, buying fake likes (from 'like farms' that create thousands of fakes accounts that will like your Facebook page) is not permissible. According to the FTC's FAQ page: "If 'likes' are from non-existent people or persons who have no experience using the product or service, they are clearly deceptive, and both the purchaser and the seller of the fake “likes” could face enforcement action." But since this was dealt with last November by Facebook already, this might be irrelevant.
Online Reviews Must Reflect Actual Experiences
This is a hard one for many online marketers. According to the FTC, all reviews, no matter if they end up on the company's website, social media profile or online review site have to be based on actual, real-life experiences. You may not make up fake reviews, alter existing ones or give incentives such as future discounts for people writing about non-existing experiences. If the person has tested your product that you provided them with and, therefore, is able to write a real review, the post, video or message must include a disclosure whether or not it was a paid review. Even if the product was supplied for free, the reviewer should state that.
Conclusion: When In Doubt, Disclose
Whenever you post anything on social media about a product, a company, a service, an event or anything else that could be bought or has value and you are being compensated for it directly or indirectly (you are employed with this company, you are a partner and receive commissions for sales, you are hired as a brand ambassador or you receive something of value in return for promoting it) — disclose. You, as the marketer, are responsible to make sure everyone understands that is a promotion.