FTC Rules: Easy to Follow, Easy to Forget

Happy Lawyers Unpacking our Barbri Books

I have the pleasure of speaking at Content Marketing World next month, in part, about the FTC rules that apply to advertising.

Disclose, Disclose, Disclose
The key to complying with the FTC rules for native advertising it to always disclose when you have a relationship with a company. That includes when you get a product for free, when you have a personal relationship with an officer of the company, and when you use affiliate links. In all of these situations, regardless of the platform, you have disclose when you are compensated for sharing an opinion or have a reason to be biased.

These rules even apply on social media platforms, including Instagram and Twitter. Usually using the hashtag “#ad” is sufficient to comply with the rules. The purpose of the rule is to let the reader know about your potential bias before they form an opinion about the product or your review.

The fine for violating these rules are harsh – up to $16,000 per violation under the current rules.

See you in Cleveland!
I have a goal of finding a way to climb this thing.

So Easy to Forget
These rules are simple to follow, and it’s also super easy to forget to remember to include the proper notice in a post. I had first-hand experience with this over the last few weeks.

My colleague and I teamed up with Barbri to study for the California Bar Exam. They gave me my study course for free (I split the cost of my colleague’s course with him) in exchange for writing a weekly post about what it’s like to study for a bar exam while practicing law. We did 11 weekly posts, and I’ll write one more when we get our results this fall.

Early in each post, I repeated verbiage that disclosed our relationship with Barbri – that was easy enough. Where I had trouble was remembering to include “#ad” on every social media post. It’s easy to forget to remember to include those three characters. There were many mornings where I had to edit my posts or delete and re-do tweets to add in “#ad.”

I recently learned I’m not alone. According to research, 37% of publishers do not adhere to the FTC rules for labeling the material as sponsored. I’m curious to see if the FTC is investigating or fining content creators who don’t follow the disclosure rules.

I’m super excited to talk about the FTC rules and how to write effective contracts for content creators at Content Marketing World. It’s one of my favorite events on online advertising. I’m just as ecstatic about speaking as I am about learning from my fellow presenters.

I’m constantly doing work related to internet law, so if you want to keep up with what I’m doing or if you need help, you can contact me directly or connect with me on TwitterFacebookYouTube, or LinkedIn.  You can also get access to more exclusive content that is available only to people on my mailing list, by subscribing here.

FTC Compliance Friendly Reminders

Praise by bark from Flickr (Creative Commons License)

Praise by bark from Flickr (Creative Commons License)

Bloggers, vloggers, and other social influencers frequently asked me about the rules regarding disclosure when partnering with companies and using affiliate links. With holidays (and therefore holiday gift guides) on the horizon, it seemed apropos to share some helpful reminder for how to comply with the FTC’s disclosure rules when you get free product or are compensated for providing a review.

It’s All About Transparency
The purpose of the FTC’s disclosure rules is transparency. When people consume content, they have a right to know whether the creator has a relationship with the company or product or whether it is 100% their independent opinion. Knowing that a person has a relationship with a company, which may or may not include financial compensation, will impact whether a person reads or view a post and how much weight or credibility to give it.

To comply with the transparency requirements of Federal law, social influencers must clearly and prominently label the content they were compensated to make as advertising to avoid misleading consumers.

Disclosure First
Many influencers put their notice that they were compensated for doing a post or that a post has affiliate links at the end of the content. This is likely insufficient to comply with the rules because consumers need to be informed before they form an opinion about a product that they’re reading a sponsored post or an ad.

In general, you should make a disclosure in the post itself and shortly before the reader receives the advertising message. The FTC recommends putting it in front of or above the ad’s headline. Additionally, the notice need to be clear and unambiguous language. To determine whether your disclosure complies with the FTC, consider your notice from the perspective of the reasonable consumer who’s seeing your content for the first time. Will he/she notice the disclosure statement and understand that they’re reading or seeing an ad?

The FTC says terms like “ad,” “advertisement,” or “sponsored advertising content” are likely to be understood but terms like “promoted,” or “sponsored by [XYZ]” don’t comply with the disclosure requirement because they could be interpreted as merely underwriting the content without influencing the statements made in it.

So what does this mean? If you write a review of a product that you got for free or got paid for writing the post about it, you have to disclose at the top of the post that you have a relationship with the company. If you use affiliate links, you have to clearly disclose those relationships as well, prior to posting the link. (In some circumstances, using the term “affiliate link” may be insufficient if the average consumer doesn’t know the difference between links and affiliate links. Yes, this happens – I recently attend a blogging conference where an attendee assumed that the terms “link” and “affiliate link” were interchangeable.)

Every Post, Every Platform
When you have a relationship with a company or are compensated for writing about a product, you have to disclose it to your audience every time you write about it – regardless of the platform it’s on or what device people use to access it. Every single time. (Yes, I know this is annoying, but it’s what the FTC requires.)

Disclosure is Everyone’s Responsibility
Everyone who is involved in the creation or distribution of native advertising should review the content to ensure that the required disclosure is present and that the material does not mislead the audience about the product or the relationship between the writer and the company. This includes middle men like ad agencies. If anyone is found to be in violation of the FTC rules about native advertising, they could be fined by the FTC – the company that created the product or service, the writer, and anyone in between who was involved – up to $16,000. That’s a stiff penalty for forgetting or refusing to disclose a relationship.

If you want to learn more about this topic, I recommend the FTC’s article, Native Advertising: A Guide for Businesses. If you want to chat with me about these issues, like how to incorporate these requirements into website terms of service or contracts with third party content creators, you can contact me directly or connect with me on TwitterFacebookYouTube, or LinkedIn. You can also get access to more exclusive content that is available only to people on my mailing list, by subscribing here.