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Is Your Agency FTC Compliant? A Guide for Attorneys

Is Your Agency FTC Compliant? A Guide for Attorneys

In any influencer marketing project, there are a myriad of people involved in both running a successful campaign and ensuring compliance around disclosure.  Compliance should be as important to the brand or agency as it is to the legal team. Lack of compliance puts everyone at serious risk.

In 2015, retailer, Lord & Taylor ended up on the front page of the Wall Street Journal and USA Today for a dress that quickly sold out when 50 Instagrammers posted the same flowy paisley smock on their feed. The reason it was deemed front page-worthy? Instagrammers that participated in the viral campaign failed to disclose that this was in fact an advertisement. Turns out, the retail giant (and their partner agencies) paid each Instagrammer $4,000 but failed to require that they disclose the fact that this was a sponsored campaign. This incident no doubt caused some serious indigestion in the retail legal field. For those of us who have been solid practitioners of influencer marketing, our immediate response was, “How could any brand or marketing agency be so stupid?!” Our second question, “Did they not have a legal team who reviews these types of campaigns?” After the Lord & Taylor incident, and subsequent bad publicity for the brand, notice began to be paid to this new world of marketing – where real people (namely influencers) are involved in creating content for major brands.

Let’s hope that any attorney working on marketing campaigns is relatively fluent in FTC guidelines, has carefully reviewed the risks, and has scrutinized the contracts between brand and any influencers. There are some steps any attorney can take to make absolutely sure the brand marketers, those running influencer marketing campaigns, are following through on all elements of compliance. Here are six elements to review with your agency or marketing team to allow you to proceed with some degree of comfort.

    1. Is there a program in place to educate all account managers, team members, and external agencies that run influencer marketing programs? (If so, ask to review it. If not, ask how they are training teams). Are all individuals who work in influencer marketing required to read the FTC guidelines and are they tested to make sure they understand them? Having a formalized process in place for all team members to fully understand the rules of disclosure is critical to ensuring compliance. Additionally, each new hire needs to be educated and clearly understand the nuances of the regulations.

    2. We all know that it’s critical that each influencer sign a contract which indicates their willingness to comply with FTC guidelines (and you, as attorney, have had your part drafting that). However, that’s only phase one. What quality assurance measures do your brand marketers or agency have in place? Ask your marketing teams how they monitor compliance once the campaign goes live. Be wary of automated monitoring because there are so many nuances in compliance that can’t be caught by algorithms alone. If there is no written process, insist on one. Additionally, I recommend you review this process yearly to allow for any changes in team management. Remember, marketers understand quality – they are in the business of creating quality content for brands. Remind them that meeting the standards of FTC compliance is equally (if not more important) than creative quality.

    3. Every attorney would ideally love to have pre-approval of all posts. With the immediacy of social media platforms, however, this is simply not efficient. Instagram Stories are built in 15-second increments and, especially for live events, are published in real time. Obtaining written approval for these kinds of social shares is incredibly impractical and will thwart your chances of creating in-the-moment buzz. Review with your marketing team what their plans are for live coverage. Video requires both verbal and visual disclosure. Ask your teams to review how they ensure the influencers understand video disclosure. It’s essential that someone on the marketing team will be monitoring the social shares while they are being posted to make sure compliance is being followed.

    4. Find me a marketer today who has never heard of FTC regulations and disclosures around influencer marketing, and I’ll tell you he or she has been living under a rock for the last three years. However, awareness does not equal understanding. That said, while marketers may be clear on what to do with paid campaigns, massive confusion still abounds when it comes to gifts or experiences. I still see far too many campaigns where influencers are boasting about expensive trips, hotel room, or merchandise – yet the disclosures are murky at best. The word “#Gifted” along with an Instagram photo of a beautiful Caribbean vista is not clear and conspicuous in my book. Be clear with your marketing team that even though no money is being exchanged, the disclosure has to be as unambiguous and clearly identified as a paid campaign. Influencers are confused about how to describe these relationships, and unfortunately marketers are too. We once gifted dozens of DIYers (do-it-yourselfers) with expensive power tools. When the resultant posts came out with the requisite #Ad attached, we got a frenzied call from our brand partner asking us to “please make those influencers stop using the word ‘#ad.’” They felt it looked spammy and was not an organic representation of the brand. Needless to say, we did not comply with their request. We did, however, take the time to educate the brand on FTC guidelines around gifts.

    5. Attorneys and brand marketers can create strict guidelines, contracts, and have a strong paper trail around disclosure, but humans are humans. They sometimes make mistakes. Ask your marketing team what kind of processes they have in place for communicating with and coordinating with the influencer. Many automated influencer platforms don’t allow for direct contact with influencers. This should be a red flag. If a post is not in compliance, your marketing team should have the quick ability to ask that the post either be edited or removed immediately.

    6. Finally, beware the snake oil salesman agencies. Influencer marketing is all the rage. AdWeek predicted it to grow into a $20 billion industry by the year 2020. Any popular marketing trend is followed by a host of agencies purporting to be experts. Ask any firm you’re hiring how long they’ve been in the influencer marketing business and to provide examples (via screenshot) of clear compliance on a variety of posts. Request examples that vary by platform (Instagram, Facebook, Twitter, etc.) and by industry to ensure they are equipped with well-rounded experiences.

The Influencer Marketing Association (of which I happen to be a founding member) is a great resource for programs, papers, and thought leadership in the industry. Compliance is not just about the legality – it’s about making sure all the marketing teams and agencies are educated, understand the FTC’s guidelines, and are committed to ethical marketing practices.

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