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Marketing Under the Influence: Understanding the Legal Implications

InfluencerMarketingCompliance

Marketers may have been uncertain about the regulatory environment at the beginning of a new administration in Washington; but it’s become clear that the FTC remains actively focused on issues of transparency and disclosure in influence marketing tactics.

I know firsthand from my work with marketing agencies that nobody wins when “legal” puts the halt to a brilliant campaign or creative idea late in the game. However, understand the stakes for your agency and clients remain high.

  • What conversations have you had with your clients, and influencers, to understand the regulations and reduce your risks, before you’re ready to take your marketing live?
  • What processes and agreements do you have in place to properly manage the campaigns, creative, and engagement, end-to-end?
  • What will do you when your client calls, because your influencer has gone rogue, putting everyone’s reputation at risk?

Agencies need to mind their compliance process as much as their creative process. Fortunately, it doesn’t need to be overwhelming for you or your client. With proactive planning and process enforcement, your agency can stay on the right side of the law in your campaigns.

What is the current regulatory environment for influencer marketing? 

Earlier this year I covered Three Rising Legal Risks in Content Marketing and Social Media for Agencies, including influencer marketing, and the FTC’s not-so-subtle education effort on disclosure rules for brands, agencies, celebrities and influencers.

September 2017 turned out to be a big one for influencer marketing regulation. The FTC shared news of its first law enforcement action against individual online influencers, and launched the follow up to its April letter campaign.

Through the eyes of the FTC, everyone in the chain of an influencer campaign is responsible for compliance – brand, agency and influencer – and all are held accountable.

What are the most common legal issues in influencer marketing for your agency?

FTC Disclosure

Here’s a typical case: You begin a social or influencer campaign without assigning responsibility for following FTC rules, or without understanding how the rules apply to all marketing channels: social media, content marketing, video, native advertising, etc. Some quick tips to compliance:

  • Do disclose (and require disclosure) whenever anything of value is exchanged brand to influencer.
  • Do disclose any kind of relationship between brand and poster (paid influencer, employee, owner, board member, agency).
  • Don’t try to fake “neutral” in any campaign, in any post.
  • Do understand how to use the hashtags correctly. Shorthand that DOES work: #ad, #promo, #sponsored, #paid, #employer, #BrandXYZPartner. Shorthand that DOESN’T work: Hashtags buried in a group (“burying the lead”); Ambiguous hashtags like #ambassador or #friend.

Copyright Compliance

The Scenario: Your agency, brand or influencer fails to get written permission to use third party content or assets in your campaign, such as a photo, video clip, or snip of copy:

  • Don’t use any third party content without written permission.
  • Do have written agreements with freelancers who contribute content (you don’t own any rights without it).
  • Don’t assume that attribution or taking “a little bit” of content eliminates the infringement.

Following Fair Advertising Rules

Example: Your client or influencer makes claims about a competitor in an influence campaign that aren’t appropriate or verifiable:

  • Don’t use trademarks of other parties in influence campaigns or appropriate another party’s trademark as a hashtag for commercial purposes.
  • Don’t position native advertising including a competitor’s brand as editorial.
  • Do only make product claims about a competitor’s brand that you can verify.

Case In Point

Want a real life example of how this all works? You can find a fast case study in disclosures in the Lord & Taylor influence campaign that ran last year, which included a variety of mistakes in paid native advertising and influencer endorsements. Read the full story: Lord & Taylor Settles FTC Charges It Deceived Consumers Through Paid Article in an Online Fashion Magazine and Paid Instagram Posts by 50 “Fashion Influencers”

What steps can you do today to set up successful campaigns for your agency and clients? 

  1. Start the planning discussions today on how to handle disclosures for all parties involved, and how creative will be reviewed, approved, and in the worst cases, removed. Train marketers, your agency team, and influencers on the FTC’s expectations, proactively.
  2. Have a model Brand Ambassador Agreement: Establish an agreement that assigns responsibility to the Influencer for complying with laws and regulations related to: IP, FTC Disclosures, Ad Claims and more. Include a set of plain-language rules and policies the Influencer needs to know and reference.
  3. DO NOT launch unless you have a plan for regular monitoring when live, and plan for removing offending content if something goes off.
  4. Keep on top of current regulatory news, legal trends, and practical strategies to successfully navigate your next influence campaign legal review.
  5. Involve your legal counsel from day one in the planning, creative and campaign process, to build your foundation on solid legal footing.

Contact me direct to continue the conversation.

Check out further resources from FTC.gov

Three FTC actions of interest to influencers

The FTC’s Endorsement Guides: What People Are Asking

 

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Contact

Sharon Toerek
Toerek Law
1240 Huron Road, Suite 200
Cleveland, Ohio
44115
Call Me: 800.572.1155
Email: sharon@legalandcreative.com

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