The Federal Trade Commission has issued new guidelines designed to set clearer rules for disclosure in social media influencer campaigns.
The guidelines state that bloggers who have received money or "in-kind payment" tied to product reviews must disclose such deals to readers. Companies that refer to a research group finding about a product must disclose any relationship with that organization.
The new rules are the first update the FTC has made to its guide for testaments and endorsements in advertising since 1980. They bring into sharper focus the relationship of bloggers and brands. The FTC chose not to make a distinction between professional bloggers and amateurs. It also does not differentiate between paying cash and providing product samples.
Violators face fines of up to $11,000 per infraction. Experts said the new regulations would have little impact on marketers following standard practices. "Most marketers are entirely above board," said Sarah Hofstetter, svp of emerging media at 360i.
The FTC said marketers and bloggers must follow the rules even if there is no requirement for a positive product review.
"It's for a marketer to take that leap of faith to know that disclosure and authenticity is the only way a brand and consumer are going to have a working relationship in social media," Hofstetter said. "What consumer is going to want to buy something from a brand that can't own up to giving something away?"
The updated guidelines also tighten the rules for celebrities, requiring them to disclose their relationships with advertisers when discussing a product in interviews or social media. Celebrities are now responsible for the claims being made.
The new guidelines were much anticipated following commission officials expressing the need to regulate the growing business of social-influencer programs. Companies regularly send bloggers products for review, and new businesses have sprung up to garner endorsements in social media channels like Twitter.
"At the end of the day, if you're honest and disclose, you shouldn't have a problem," said Sean Corcoran, an analyst at Forrester Research, which has endorsed the practice of what it calls "sponsored conversations." He added: "Marketers will have to understand the best way to do this, but they should be covered if it's authentic and disclosed. This shouldn't hinder the business."
The commission voted 4-0 to approve the new guidelines.
— Nielsen Business Media